PSC approves Mon Power proposal to terminate contract with Morgantown plant

MORGANTOWN, W.Va. — The state Public Service Commission has approved a plan that will allow Mon Power to pay a Morgantown power plant operator $60 million to terminate an agreement to purchase electricity from plant through 2027.

In a order signed Dec. 20, the PSC agreed to a proposed settlement reached in November by Mon Power and Morgantown Energy Associates.

MORE read full PSC order here

In the November hearing before the PSC, Mon Power said it no longer needs the power generated by the MEA plant located on Beechurst Avenue. The company said it can save ratepayers $17 million a year by terminating the contract.

MEA owners, Connecticut-based Starwood Enterprises, said it believed the buyout offer was “fair and equitable.” MEA Managing Director Jeffrey Delgado testified that if the PSC allowed the termination, the plant would stay open, with a reduction in staff, and continue to produce steam heat for the WVU campus. It would continue to use waste coal this winter and then switch to natural gas.

“We would meet WVU’s peak steam needs (this winter) and then transition to the existing gas boilers that are on site,” Delgado said.

He also testified MEA planned to install two more natural gas boilers next year to totally transition the plant away from waste coal.

The PSC order requires MEA to provide LP Mineral, the company that supplies the waste coal to the plant, six months notice before the coal fired boilers are shutdown. The PSC has also ordered MEA to make “certain reporting requirements.”

LP Minerals President James Laurita testified in November the jobs lost through the contract termination would cost the economy $17 million a year, the same amount Mon Power says terminating the deal would save ratepayers. Laurita believes as many as 40 jobs could be cut at the plant.

“I’m saying $17 million, just those three vendors and the 40 employees, the value is $17 million a year that’s going to be lost just to the community of Morgantown,” Laurita said. “That’s $300 million over (the remainder of the contract). So there’s $300 million that’s lost to the community.”

Though asked several times during the November hearing, Delgado would not commit on how many jobs would be eliminated at the plant.

The MEA plant has been operating along the banks of the Monongahela River between WVU’s downtown and Evansdale campuses for 30 years. The plant was created under the Public Utility Regulatory Policies Act (PURPA). The 1978 act “was meant to promote energy conservation (reduce demand) and promote greater use of domestic energy and renewable energy (increase supply).”

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