MORGANTOWN — Mon Power and its FirstEnergy sister Potomac Edison have agreed with a number of green energy groups to set aside plans to upgrade the coal-fired boilers at their Fort Martin and Harrison power plants.
The agreement comes in the form of a settlement of two related FirstEnergy filings concerning consumer rates just approved by the Public Service Commission after nearly four months of negotiations.
As a result of the settlement, the companies will lower their total 20121 fuel-related charges to consumers by 3.7%, $50.08 million. In exchange, the companies won’t pursue the planned upgrades the green groups objected to.
The companies originally proposed to reduce rates by 4%, $54.99 million, offsetting that somewhat with a corresponding rate increase of $4.97 million to cover costs associated with the upgrades, estimated at a total $246.08 million across several years.
In negotiations, the companies agreed to hold off on the upgrades and offer the lower rate decrease.
FirstEnergy proposed the 4% rate decrease in its annual August ENEC filing: expanded net energy costs, which deals with a company’s fuel-related costs and allows it to return lower costs to the consumer or recover higher costs as needed. The upgrade project was filed the same day and the two were consolidated for the PSC ruling.
Both side celebrated the settlement as a win-win.
MonPower said in an email exchange, “We believe the settlement is a fair and reasonable resolution of these cases. With electrical use increasing due to time spent at home during the pandemic, any opportunity to save on electric bills is helpful for our customers. We are committed to providing safe and reliable electricity at an affordable cost, and we are pleased to be able to lower electric rates for our customers by $50 million, or 3.7%, in 2021 as a result of this settlement and commission action.”
FirstEnergy continued, “We continue to plan a multi-year modernization and improvement program at our two plants. Expected to be complete by 2025, the program will include continuing air emission reduction projects at both plants related to air standards pollution rules. It will also include new wastewater treatment projects to meet the U.S. Environmental Protection Agency’s new effluent limitation guideline requirements.”
FirstEnergy pointed out that the settlement allows it to recover $4.91 million in 2021 for environmental compliance projects, which covers costs from 2018 through 2021 and for forecast operations and maintenance costs. The O&M costs will be subject to further review in their 2021 and 2022 filings (for rates in 2022 and 2023).
In a release, two of the green groups, West Virginia Citizen Action Group (CAG) and Solar United Neighbors (SUN), said they applaud the commission’s approval of the settlement “at a time when ratepayers should not be asked to foot the bill for spending on uneconomic power plants.”
They feared, they said, that the utilities’ customers would assume a long-term financial burden while FirstEnergy and its shareholders would receive a guaranteed revenue stream for those capital costs. “FirstEnergy made this proposal without considering whether it would be less expensive for its customers to retire one or more of these coal units.”
The settlement spells out that before undertaking the upgrades in future years, they must provide an economic analysis – tracking net revenues and operational costs – of the coal units.
“This requirement will help ensure that FirstEnergy considers retirement, and investments in clean energy options like solar and energy efficiency, before proposing additional spending on its coal units,” the groups said.
CAG’s Gary Zuckett said, “FirstEnergy wanted to spend hundreds of millions of their customers’ hard-earned dollars upgrading decades-old generating units. West Virginians know what it’s like to decide whether it makes sense to make an expensive repair on an aging car. FirstEnergy should do the same before spending our money on these units.”
The West Virginia Energy Users Group and the Sierra Club also participated in the settlement talks.
In a separate release, Karan Ireland, West Virginia Sierra Club’s senior campaign representative, said, “The approval of our settlement will allow consumer advocates to gain a clearer picture of the costs associated with the utility’s uneconomic coal plants. By both requiring a forward-looking analysis of its coal-fired generation and by being fully transparent about uneconomic and unnecessary operation of its Fort Martin plant the public will be given an accurate understanding of how Mon Power is burning expensive dirty coal needlessly in order to charge consumers more money.”
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