Acquisition of Pleasants Power Plant would transfer liability and costs to local utility customers

Contacts:

Emmett Pepper, Energy Efficiency West Virginia (917) 617-8208, emmett@eewv.org

Kathryn McGrath, Earthjustice, (202) 516-6932, kmcgrath@earthjustice.org

 

 

Local groups respond to report released today

 

Charleston, West Virginia — Today Mon Power and Potomac Edison—regulated subsidiaries owned by Ohio-based FirstEnergy—filed a report with the Public Service Commission of West Virginia with updates concerning a possible acquisition of the Pleasants Power Station near Belmont, West Virginia, along the Ohio River.

Mon Power and Potomac Edison have not completed an analysis to determine if the acquisition is in the best interests of the Companies or their customers, but suggest that customers start paying a temporary surcharge to continue to operate for up to 12 months. The report cites a number of challenges to continued operation of Pleasants, specifically mentioning federal wastewater and air quality regulations, and declining energy prices. The report did not evaluate the costs and liabilities related to the coal ash pond and landfill at Pleasants, and does not acknowledge that Energy Harbor has the option to extend its lease agreement and continue operating the plant into early 2024.

“We are still evaluating the filing. But one thing is clear: Mon Power is asking for a rate increase for 12 months to subsidize this plant without taking evidence on the prudence of the rate increase, whether paying for this plant will benefit ratepayers, and whether ratepayers even need its power,” said Emmett Pepper, Policy Director for Energy Efficiency West Virginia.

“This is further evidence that we sorely need a competitive, market-based procurement process for energy in West Virginia that doesn’t constantly raise costs for families and businesses. It’s past time to be investing in locally-owned, renewable, and efficient energy technology instead of desperately trying to bail out coal interests and potentially taking on responsibility for their toxic waste,” said Gary Zuckett, co-founder of West Virginians for Energy Freedom and executive director of West Virginia Citizen Action Group. “West Virginians can’t afford to take on clean-up costs for decades of coal ash dumping and see those expenses passed along in our electric bills.”

The potential purchase of the 44-year-old coal-fired power plant by Mon Power and Potomac Edison would transfer significant liabilities and costs from FirstEnergy investors onto West Virginians. Local customers of Mon Power and Potomac Edison utilities would pay for, maintain, and accept liability for the aging Pleasants Power Station and pay a guaranteed profit for FirstEnergy’s investors.

Another FirstEnergy subsidiary, Allegheny Energy Supply, still owns the coal ash pond and an ash landfill at Pleasants. Nothing prevents FirstEnergy’s Allegheny Energy Supply from reacquiring Pleasants as part of their merchant generation business, rather than shifting the liabilities and costs to West Virginia customers via regulated utilities.

Burdening ratepayers with the costs, risks, and liabilities that come with the onsite coal ash pond and landfill is especially unreasonable given the fact that Mon Power does not need to buy another power plant to meet customers’ electricity needs. The power plants Mon Power already owns annually produce more energy than FirstEnergy’s West Virginia customers use. Residential rates for Mon Power and Potomac Edison customers increased 13.6% and 14.7%, respectively, from Jan. 2022 to Jan. 2023. Mon Power and Potomac Edison customers’ rates have increased by more than 60% over the past 15 years, and Mon Power and Potomac Edison will be filing for yet another rate increase as soon as April.

West Virginians for Energy Freedom is committed to advancing energy choice for communities in West Virginia and will be coordinating a public response once the acquisition application is filed. Sign up at energyfreedomwv.org to learn more and stay engaged.

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Background

Pleasants Power Station is currently owned by Energy Transition & Environmental Management (ETEM), a company that specializes in winding down operations at power plants and closing them. Since March 2022, the plant has been scheduled to close by June 1, 2023. The power plant was previously owned by Allegheny Energy Supply, a merchant subsidiary of FirstEnergy, then transferred as part of bankruptcy proceedings to a privately-owned company spun off from FirstEnergy: Energy Harbor. But FirstEnergy’s subsidiary Allegheny Energy Supply kept ownership of the plant’s coal ash pond and an ash landfill that carry significant liabilities. As regulated utilities, if Mon Power and Potomac Edison acquire the plant, its customers pay the costs of operating, maintaining, and complying with all applicable laws at the plants, along with a guaranteed profit on capital spending on such plant, through electric rates.

In 2017, FirstEnergy sought a nearly identical transfer to the one being discussed today. Under that proposal, Allegheny Energy Supply would have sold Pleasants and the coal ash facilities to its affiliate company Mon Power. This transfer would have shifted all of the plant’s costs and liabilities from FirstEnergy’s investors to West Virginia electric customers. The Public Service Commission rejected the proposal, saying “there should be protections for ratepayers from the impact of future liability” regarding the coal ash impoundment, and requiring that ratepayers be fully indemnified from pre-existing environmental liability. The Commission insisted that FirstEnergy must assume some of the risk that the plant itself would not be as profitable as was being projected.

Following MonPower and Potomac Edison’s offer to evaluate potentially acquiring Pleasants, the PSC directed the utilities to submit a report on that evaluation, filed today.