That was the conclusion of the West Virginia Consumer Advocate in its reply brief in the matter of the sale of the Pleasants power station to regulated West Virginia affiliates Mon Power and Potomac Edison.
FirstEnergy has been engaged in a scheme to liquidate its failing competitive generation business. In states where generation is competitive, FirstEnergy is all about selling its money-losing assets. But in states where generation is regulated, FirstEnergy has been pursuing profitable "sales" of its failing assets into the regulated system, where it is guaranteed to recover all its costs to run the plant, plus a regulated profit. Several years ago, FirstEnergy was successful in selling one of its failing assets into the West Virginia regulatory system. Ratepayers have paid higher rates to operate "their" power station at a loss. ITYS. Now FirstEnergy has another failing asset for sale and it wants to double down on increased rates for West Virginia electric consumers. This hotly contested issue has been going on for the past year and is finally facing a decision by the West Virginia Public Service Commission.
Our Consumer Advocate, who represents the interests of West Virginia electric consumers, has done the math:
First, the rate benefit to residential ratepayers is a one year benefit of $11.52. The Companies provided no evidence of rate impacts beyond December 2018. The absence of this information is intentional.
As originally proposed by the Companies, if the acquisition of Pleasants is approved, there will be a $31,486,971 net decrease in rates for the 16-month period of September 1, 2017 through December 31, 2018, which is a 1.6% overall decrease. Residential customers would experience a decrease of about 0.9%. The decrease for a residential customer using 1,000 kilowatt-hours per month would be $0.96 per month, which would result in a decrease to $111.52 from 112.48 per month. It is important to note that the decrease in customer rates is guaranteed only through December 2018.
As well, all risk from the sale of energy from the plant into energy markets will transfer from FirstEnergy shareholders to West Virginia electric consumers. In addition, the risk of owning and operating the plant itself (and its filthy ash pond) will also transfer to ratepayers. On your behalf, the Consumer Advocate says, "No thank you."
West Virginia captive ratepayers are not hedge managers or virtual traders in the PJM markets. If the Commission approves this transaction that is what they will become: buyers of significant surplus capacity that Companies are betting (on their behalf) will provide benefits for years into the future. Pleasants was rejected by FirstEnergy as too risky. The overwhelming evidence in this case contradicts all Companies’ claims that there will be any benefits to captive ratepayers. Now FirstEnergy wants Companies to manage that risk for 500,000 ratepayers. As the legal representative of ratepayers, no thank you. The Pleasants acquisition should not be approved.
But yet the PSC Chairman is toying with the idea of a
"conditional sale." I guess he must be feeling the pressure from coal companies who don't want to see one of their buyers disappear, plant workers who don't want to see their jobs disappear, and the community around Pleasants who don't want to see one of their employers and tax payers disappear. Why is it up to West Virginia electric customers to suddenly provide these benefits to suppliers, workers and the community? When Pleasants was profitable, FirstEnergy took all the profits, setting nothing aside to compensate these parties at the inevitable time that the plant was no longer profitable. Perhaps it is FirstEnergy who should be saddled with the costs of its own failure. Ordering West Virginians to pick up the burden of FirstEnergy's failure is a losing proposition. How long should we do this? At what point will closure of this old power station release West Virginians from this burden? Will we be forced to pay extra to support coal companies, workers and communities in perpetuity because no one has the foresight to plan for the inevitable? This has to end, and responsibility for the failure should be placed on the party who caused it... FirstEnergy.
A "conditional sale" won't work out any better than FirstEnergy's last "conditional sale" of Harrison. Despite the PSC attaching "conditions" to protect ratepayers from that disaster, we've paid millions in increased rates. A "conditional sale" is a coward's solution to try to please everyone. And guess where the blame is going to go if a "conditional sale" ends up costing ratepayers more money?
The CAD must begin by emphasizing that if this transaction is approved the harm that redounds to West Virginia captive ratepayers will be a legacy of this Commission.
No thanks, FirstEnergy.