WV Utilities purchasing coal fired power plants; Poor decision for ratepayers

Both of West Virginia's major electric utilities - Appalachian/Wheeling Power and Mon Power / Potomac Edison - have announced plans to purchase additional coal-fired power plants in 2013. Appalachian/Wheeling are planning to purchase a total of 1667 MW (half of the Mitchell power plant and a fraction of the John Amos power plant) from Ohio Power, another subsidiary of Appalachian/Wheeling's parent company, American Electric Power. Similarly, Mon Power / Potomac Edison are planning to purchase 80% of the Harrison power plant from another subsidiary of their parent company, FirstEnergy. 

Currently these plants are selling their power into deregulated electricity markets in nearby states where they have to compete with other power plants. Because of the low price of natural gas, coal-fired electricity is more expensive and coal generation has fallen to record lows. FirstEnergy's profits fell 20% in third quarter 2012, in part due to reduced profits in the competitive electricity market. If these plants can be sold into West Virginia's regulated electricity system, they will be allowed to charge ratepayers to recover their operating costs plus a PSC-established rate of return. In other words, while utilities around the country are getting more and more of their electricity from natural gas, Ohio-based AEP and FirstEnergy are trying to sell some of their aging coal plants to West Virginia's captive ratepayers. 

Neither company has issued a request for proposals to seek out other ways to meet its capacity needs. Nor have they analyzed an aggressive ramp-up of energy efficiency efforts to cut long-term electricity demand. These proposals highlight the need for a real integrated resource planning process in West Virginia, overseen by the Public Service Commission, that would require utilities to thoroughly evaluate the costs, benefits and risks of different options, including efficiency, for meeting long-term power needs. 

Read more about FirstEnergy's proposal. 

Read more about AEP's proposal. 

Check back soon for updates on these cases and opportunities to make your voice heard. Or email us at energyefficientwestvirginia@gmail.com if you're interested in getting more involved.