Business, Energy, State Government

WV Energy Users Group asks PSC to require Mon Power/Potomac Edison — not ratepayers — to bear costs of Pleasants plant negotiations

MORGANTOWN – The West Virginia Energy Users Group – a coalition of 12 industrial power customers across the state that use large amounts of electricity – are concerned that Mon Power and Potomac Edison didn’t have all their cards on the table when they sought Public Service Commission OK on a $36 million interim solution for the Pleasants Power Station.

And they’re asking the PSC to require the company stockholders – not the ratepayers – to bear the costs of keeping the plant operable while plant owner Energy Transmission & Environmental Management negotiates a separate deal with Omnis Fuel Technologies.

In April the PSC allowed Mon Power and FirstEnergy sister Potomac Edison to continue pursuing a letter of intent with ETEM to keep the Pleasants Power Station open in order to continue evaluating the possible purchase of the plant.

A possible customer surcharge – $3 million per month, or $36 million for the year — to keep the plant ready to reactivate, would depend upon the two companies agreeing to the LOI and the PSC approving it.

But in late May, the companies told the PSC they learned that ETEM is focused on a proposed transaction with Omnis that would keep Pleasants operating using the hydrogen byproduct of Omnis’ graphite production operations, which would negate the need for the companies to buy Pleasants.

They told the PSC that Omnis and ETEM must sign a purchase agreement by June 10, and must close the transaction on or before July 31.

The WVEUG expresses a number of concerns in its Friday filing. One is that talks between ETEM and Omnis had been going on for more than 60 days – meaning before the power companies sought PSC OK for their interim solution. So, the alleged urgency for a decision that the companies claimed did not in fact exist.

“This new disclosure fundamentally alters the context for the Commission’s April 24 Order granting the Companies’ requested interim solution and … calls into question the necessity and propriety of the relief granted by the Commission’s April 24 Order with respect to the conditional ratepayer surcharge and continued negotiation of an LOI with ETEM,” they wrote. “Obviously, if a deal is consummated by and between Omnis and ETEM, then there is no need for the Companies to negotiate an LOI with ETEM.”

WVEUG worries that an LOI with ETEM would inappropriately obligate the companies and its ratepayers to reimburse ETEM for costs that are not properly allocated to them. With the July 31 deadline in view, “it would be inappropriate for the Companies and their ratepayers to subsidize the costs to maintain Pleasants during this timeframe when a private third-party is contemplating the purchase of Pleasants.”

A letter of intent should not obligate Mon Power and Potomac Edison to bear ETEM’s or current operator Energy Harbor’s costs, including workforce costs, WVEUG said. “That would impose substantial liabilities – payment of wages, workers’ compensation, employee benefits, employment discrimination laws, etc. – on the companies and, by extension, its ratepayers.”

The group concludes, by requesting that any costs incurred as a result of LOI negotiations be borne by the companies and FirstEnergy shareholders, not captive ratepayers via a surcharge. And it asks the PSC to clarify that it will not approve any LOI that obligates the companies or its ratepayers to incur costs and liabilities related to the Energy Harbor workforce or to maintain Pleasants in an “able to run” status during the period of time when ETEM is actively negotiating with Omnis or any other party.

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