WILLOW ISLAND, W.Va. — Two First Energy subsidiaries are seeking regulatory approval to acquire a power station from a third subsidiary that would simultaneously resolve a projected 10-year energy capacity shortfall and decrease bills for customers.
“We identified a pending generation capacity shortfall that would start this year and would continue to grow for the next 10 years out to 2027,” First Energy Spokesperson Todd Meyers said. “Some updated forecasts showed that ultimately it would be about 1400 megawatts.”
One megawatt correlates to approximately 1000 residential customers.
“We were going to get the power from somewhere,” Meyers said. “And if we didn’t have our own generation, we would have to go out and make market purchases, which can be very volatile. You’d be forced to pay whatever the going rate was.”
The solution is to acquire the Pleasants Power Station at $195 million, which Meyers said was easily the best solution on the table following a competitive bidding process established through an independent consultant.
“That plant, even though it’s located right now in West Virginia, is not dedicated to West Virginia customers,” Meyers said.
FirstEnergy is moving away from competitive generation energy markets–meaning the company is mostly selling or retiring it’s merchant facilities and similar power plants. The FirstEnergy subsidiary that currently owns Pleasants Power Station, Allegheny Energy Supply, may be forced to deactivate the plant if the acquisition is not approved by regulators.
“We believe that it also comes with ancillary benefits,” Meyers said. “Although the most important thing, of course, is to resolve that capacity shortfall.
Those ancillary benefits include saving 200 jobs in West Virginia while simultaneously saving local and state tax revenue.
“It could be deactivated,” Meyers said. “That means you wouldn’t have people working there. There still may be some tax revenue associated with having a shuttered plant, but it would not be the same.”
Mon Power made a similar acquisition several years ago in Harrison County in hopes avoiding a capacity shortfall, but Meyers said the energy markets are changing rapidly. Demand, in particular, is on the rise.
“We had probably a capacity cushion with Harrison [County] that we thought would last longer,” Meyers said.
If the purchase is approved by the Public Service Commission of West Virginia and the Federal Energy Regulatory Commission approve the $195 million acquisition, monthly bills for typical Mon Power and Potomac Edison West Virginia residential customers using 1,000 kilowatt-hours (kWh) of electricity per month would drop about $1 per month, or $12 per year.
Mon Power supplies electricity to both its 385,500 customers and 137,000 Potomac Edison customers in the state’s Eastern Panhandle.