FirstEnergy wants YOU (to pay for its overpriced power)!
Who is FirstEnergy, and how does this affect me?
FirstEnergy, the parent company of Mon Power and Potomac Edison, is one of two major electric utility companies in the state of West Virginia.
FirstEnergy wants its West Virginia ratepayers to bail out one of its struggling coal-fired power plants. Currently owned by one of FirstEnergy’s deregulated Ohio subsidiaries, Allegheny Energy Supply, the Pleasants power plant is failing to compete against less expensive power sources in that market. On December 16, 2016, MonPower submitted a Request for Proposals (RFP) for 1,300 megawatts of generation capacity. It is no coincidence that the Pleasants Plant would uniquely qualify. On March 7, 2017, MonPower and PotomacEdison submitted a formal request to the Public Service Commission (Case #17-0296) to purchase the Pleasants Plant.
How would that benefit FirstEnergy?
Because, in West Virginia’s regulated utility market, Mon Power is guaranteed a positive rate of return. This means that West Virginia ratepayers would be forced to pay for more power generation instead of cheaper alternatives.
Has FirstEnergy done anything like this in the past?
Yes, in October 2013, the PSC approved a similar transfer when MonPower purchased a 79.46% share of the coal-fired 1,984 megawatt Harrison Power Station from Allegheny Energy Supply. MonPower argued that this was in the public interest, but instead, estimates by the Institute for Energy Economics and Financial Analysis show “that customers have lost more than $160 million relative to what they would have otherwise paid for electricity” (Kunkel).
How does FirstEnergy justify forcing West Virginia ratepayers to pay for their bad investments?
FirstEnergy submitted an Integrated Resource Plan, or IRP, to the West Virginia Public Service Commission. Integrated Resource Planning is a process by which utilities determine the mix of resources they will use to meet projected demand for electricity at the lowest possible cost to consumers. The IRP submitted by FirstEnergy predicts extensive demand growth and a shortfall of generation capacity within this year, but considers very few energy efficiency programs.
So FirstEnergy needs access to more power to meet growing demand for electricity?
Not necessarily. FirstEnergy’s IRP justifies a power plant transfer based on a predicted 850-Megawatt (MW) shortfall in generating capacity in the coming decade (Tincher, “Groups say FirstEnergy”). But that shortfall only occurs if FirstEnergy actually sees electricity demand grow by more than 2% each year (Brown, “FirstEnergy being questioned”).
Can FirstEnergy minimize its projected demand growth?
Yes! There are many ways that FirstEnergy can minimize demand growth: through energy efficiency programs; demand response technology; and investments in renewables like solar, wind, and biomass.
For workable alternatives to more coal-fired power, look no further than West Virginia’s other major electric utility. In contrast to FirstEnergy, American Electric Power and its subsidiary Appalachian Power are taking steps to diversify their power sources while reducing carbon emissions from existing coalfired plants. According to its 2016 Sustainability Report, American Electric Power expects to add around 3,400 MW of solar and 6,300MW of wind power by 2034. The report states, “Our strategy to diversify includes increasing our use of natural gas and renewable generation and reconfiguring the grid to support further integration of distributed energy resources, increased energy efficiency and demand response, and the growth of other customerdriven technologies. The expansion of renewable resources is a key driver of growth in our transmission business” (qtd. in Tincher, “AEP confronts coal”).
Yet, FirstEnergy refuses to consider any of these viable and necessary alternatives to its outdated and regressive business model. Instead, it wants a bailout from working West Virginia families.
These other options...are they cheaper than coal-fired power?
According to a 2012 analysis by Optimal Energy, an aggressive energy efficiency program could reduce power demand by 1.2% per year, at a cost of $17-$40 per Megawatt/hour (MWh). In 2013, FirstEnergy proposed a similar transfer of its Harrison power plant, at a cost of $74 per MWh. Rising generation costs make energy efficiency even more competitive!
Energy efficiency sounds like a win-win!
Indeed, it is. Energy efficiency is the cheapest and simplest way to minimize energy demand growth. In addition to saving consumers money, energy efficiency creates new jobs and business opportunities, and reduces greenhouse gas emissions. So it is especially concerning that energy efficiency does not play a larger role in FirstEnergy's resource planning. Rather than spending our hardearned money on another dirty coalfired power plant, FirstEnergy should be working to build a more sustainable energy future and helping to secure West Virginia’s place in America’s booming clean energy economy.
What can I do to help?
The Sierra Club’s Energy Efficiency Campaign is planning activities, including petitions, formal comments to the PSC, and public rallies. For more information, contact: Jim Kotcon (jkotcon@gmail.com), Laura Yokochi (lyokochi@aol.com), or Pamela Ellis (pamelaellis500@gmail.com).
Sources:
Brown, Andrew. “FirstEnergy being questioned about future plans.” Charleston GazetteMail 12 March 2016.
--. “FirstEnergy CEO says Pleasants power plant sale may happen.” Charleston GazetteMail 27 April 2016
Kunkel, Cathy. Re-regulating coal Plants in West Virginia: A Boon to FirstEnergy, a Burden to Ratepayers. Institute for energy Economics and Financial Analysis. September 2016.
Optimal Energy. “Save Money, Create Jobs: How Energy Efficiency Can Work for West Virginia.” 29 November 2012.https://www.scribd.com/doc/117716627
Tincher, Sarah. “Groups say FirstEnergy clearing path for coal.” The State Journal 5 May 2016.
--. “AEP confronts coal ‘risk’ with cleaner option.” The State Journal 2 June 2016.