Business, Energy, State Government

Parties express support for Mon Power/Potomac Edison rate hike case settlement; Longview Power details its objections

MORGANTOWN – All parties in the recent proposed settlement for one of Mon Power’s and Potomac Edison’s rate hike cases voiced their continued support for the settlement following a hearing on the issue. Longview Power, which did not sign on to the settlement, remains the sole holdout and repeated certain demands for the companies next filing.

This is their ENEC case — expended net energy cost — designed to allow utilities to cover their costs of producing power. They originally asked for $167,465,330, which they projected would have added $9.19 to the average monthly residential bill, raising it from $120.20 to $129.39 — a 7.8% hike. This request was intended to cover the majority of their cost under-recovery, with a second case to follow in 2024.

In the settlement, all signatories, agreed to a total under-recovery of $254,886, 662, to be spread across three time periods: $55,427,038 (with a $15,234,610 over-recovery factored out) to be recovered March 27, 2024 through Dec. 31; $92,112,507 to be recovered Jan.1-Dec. 31, 2025; and $92,112,507 to be recovered Jan. 1-Dec. 31, 2026.

The initial monthly impact on an average residential bill would fall from $9.19 to $3.77.

The companies also agreed to forego an ENEC filing for 2024, unless they either under-recover or over-recover by a total $50 million from January through June. If that occurs, any party involved in this settlement may seek a new ENEC proceeding by Sept. 1, 2024.

There were other stipulations about Mon Power better managing its coal supplies at its Fort Martin and Harrison plants, which the companies agreed to.

In a series of Thursday filings with the Public Service Commission, the parties aired their views on the settlement. Mon Power and Potomac Edison said, “The stipulation provides meaningful rate relief from the initial filing and reduces the impact to an average residential customer.” It also encourages rate stability.

Regarding Longview, they said, “Longview had numerous allegations against the companies and their operations that are without merit. The companies believe that the nearly daylong hearing on Nov. 30 and their rebuttal testimony show that the Longview contentions either incorrect , ill-advised or unsupported.”

The PSC’s Consumer Advocate Division said the companies engaged in no imprudent conduct that would undermine their ENEC case. “The companies’ fuel costs are reasonable in the context of extremely volatile energy markets over the last two-plus years. … The CAD believes the settlement reached among the parties is fair, reasonable, and in the best interest of residential ratepayers.”

A coalition of the West Virginia Citizen Action Group, Solar United Neighbors and Energy Efficient West Virginia reviewed some of the companies’ coal supply issues that led to them operating the two plants at a loss, and again agreed to the actions they will take to address them.

“Because the joint stipulation is a reasonable resolution of this case that will advance the public interest, the commission should approve it without modification,” they said.

The West Virginia Energy Users Group, a coalition of industrial customers, noted that the initial proposed hike would have raised their rates by 13.2%, while the settlement results in a much lower 5% increase. Overall, the settlement provides rate certainty for all customers by eliminating a 2024 ENEC filing.

Longview, the holdout, aired its objections in a 32-page filing. It detailed what it viewed as various imprudent actions by the companies in running the plants.

Among them, if they had had sufficient coal in 2021 for the Fort Martin plant and had the Harrison plant had fewer unplanned outages, they could have earned an additional $59 million and $89 million respectively (from sales to PJM, the regional grid).

If they had sufficient coal on site at Fort Martin in the second half of 2022, it could have earned an additional $53.5 million. And if Harrison Unit 2 had been online during Winter Storm Elliott, the companies would have received an additional $40.5 million of performance bonus payments from PJM.

Loview said, “The primary disagreement between Longview and the companies is the degree of culpability that should be attached to the companies’ errors and omissions that caused these mistakes. … Longview believes that these errors and omissions all rise to the level of unreasonable or imprudent conduct. The companies, on the other hand, do not concede that even the most egregious of these mistakes rises to that level. Regardless of how the commission decides to characterize the companies’ conduct, one thing is clear: the companies’ ratepayers deserve better.”

Longview again made two recommendations not included in the settlement: appointing an independent third party to thoroughly review all aspects of the companies’ next ENEC filing; and requiring the companies to provide ratepayers with a positive return on the costs they pay in their base rates to operate, maintain and manage the plants.