Business, Energy, State Government

Longview Power asks PSC to trim $145 million from Mon Power/Potomac Edison $167.5 million rate hike case

MORGANTOWN – FirstEnergy sisters Mon Power and Potomac Edison are seeking a new rate hike of $167.5 million to cover their costs of producing electricity. But competitor and Mon Power customer Longview Power is asking the state Public Service Commission to whack almost all of that and approve only a small fraction of the request.

The PSC case is Mon Power’s and Potomac Edison’s annual ENEC – expended net energy cost – filing.

They are asking for $167,465,330, which they project would add $9.19 to the average monthly residential bill, raising it from $120.20 to $129.39 – a 7.8% hike.

Longview Power in a Friday filing asks the PSC to dismiss $144,805,585, saying the FirstEnergy companies have not prudently managed their costs or complied with PSC directives. They are asking the PSC to dismiss these costs with prejudice, meaning the companies could never again seek to recoup them.

That would leave the companies a hike of just $22,659,745 in this case.

All told, Mon Power and Potomac Edison calculate an under-recovery (recouping less than they spent) of $243,032,313. They propose to split the total $243 million across two years, so this ENEC request, filed Aug. 31, is for the $167.5 million.

Longview points out that the portion they want dismissed – the nearly $145 million – is under-recovery for the period of July 1, 2021, through June 30, 2022. State code requires the PSC to determine that “the costs resulted from prudent actions on the part of the utility and were reasonable.”

“Longview understands that $144,805,585 is a lot of money to the companies, but it is also a lot of money to ratepayers,” Longview said. “In any event, the companies have only themselves to blame for the situation in which they find themselves.”

The period in question – Fiscal Year 2002 – was a period of rising energy prices and the companies should have been operating their power plants at high capacity and selling the power into the PJM regional energy grid, which would have reduced their ENEC costs and saved ratepayers money.

Instead, Longview said, the companies ran their Fort Martin and Harrison coal-fired plants at lower capacities. “Consequently, instead of making money during the 2021-2022 Review Period, the Companies lost money at an alarming rate.”

The reduced output, Longview said, cost the companies somewhere from $59 million to $89 million; and the plants also struggled with coal procurement and inventory during this time.

“The companies have known for eight months that they must justify the reasonableness and prudence of their costs. They have known the specific criticisms of their management decisions that they must explain and justify. The companies could have avoided this disallowance had they done what the Commission told them to do [in a prior order, to justify their FY 2022 costs].”

The companies will respond to Longview’s filing in a future filing of their own.

Also before the PSC is the companies’ base rate hike request: $207.5 million for infrastructure and for their energy assistance program. The hike would cost the average residential customer $18.07 per month – raising a bill from $120.20 to $138.27.