Associated Press
11 April 2006
CHARLESTON - State regulators have approved a financing and restructuring plan sought by Allegheny Energy Inc. to pay for a $338 million pollution control project at its Fort Martin Power Station, the company said Monday.
The Public Service Commission, in orders issued Friday, approved the transfer of most of Allegheny Energy's coal-fired plants in West Virginia, including the 1,100-megawatt Fort Martin plant, to subsidiary Monongahela Power.
The transfer will enable Allegheny to use securitized funding to finance the installation of flue gas desulfurization systems, also called scrubbers, at Fort Martin, the PSC said.
Scrubbers reduce emissions of sulfur dioxide, allowing coal-fired power plants to burn high-sulfur coal without violating federal air pollution rules.
Greensburg, Pa.- based Allegheny had pushed for a state law passed last year that allows securitized funding, in which utilities obtain loans entirely backed and paid for by consumers.
Allegheny said it will issue environmental control bonds to pay for the scrubber project. The bonds will be paid off with revenue from an environmental surcharge on customers' bills of about $2.45 per month. The typical residential customer currently pays about $70 per month.
Allegheny had said previously that securitized funding was the lowest cost method to pay for the project.
The scrubber project is expected to completed in 2009 and is part of an overall effort aimed at reducing sulfur dioxide emissions by nearly 75 percent, compared to 2002 levels, the company said.
''We appreciate the Commission's support of this important step in our environmental stewardship program,'' Allegheny President and CEO Paul J. Evanson said in a news release. ''Installing scrubbers at Fort Martin will bring cleaner air to the region, enable us to use more local coal and create more than 350 construction jobs in West Virginia.''
The power plant transfer includes swapping Monongahela Power's interest in the Hatfield's Ferry plant in Pennsylvania for Allegheny's interest in Fort Martin. Monongahela Power also will assume ownership of the Albright, Rivesville and Willow Island plants, while Allegheny will keep its interest in the Harrison and Pleasants plants, the PSC said.
Monongahela Power's total generating capacity will increase by 593 megawatts to 2,699 megawatts, the PSC said.