West Virginia’s Public Service Commission ordered power companies to go ahead with negotiating what it would take to acquire the Pleasants Power Station, which is set to shut down in a little more than a month.
But in an order filed Monday afternoon, commissioners left open the question of whether the power companies could institute a surcharge on ratepayers for the costs of continuing to employ workers and keep the plant operational.
Pleasants is a 1300 megawatt two-unit coal power plant located on the Ohio River near Belmont, Pleasants County. About 150 people work at the plant, which began operations in 1979.
Until late last year, it had been owned by Energy Harbor, which is pursuing a green energy strategy and transferred control of the plant to Energy Transition and Environmental Management, which had plans to remediate and demolish it.
Monongahela Power and Potomac Edison, subsidiaries of FirstEnergy, were directed to consider taking over Pleasants Power Station and have approached ETEM about whether they can come to terms. They are discussing whether they can agree on a letter of intent.
“The plant may have value to the customers of Mon Power. We don’t know for sure. But the ability to realize those benefits will be lost if the plant is put in a condition where demolition is the ultimate goal,” said Mark Valach, a power company manager during an evidentiary hearing at the PSC.
“It’s a decision that should not be rushed.”
Representatives of the power companies have indicated those negotiations are complicated. One factor is an assessment of the plant’s current condition.
Additional questions include whether the Federal Energy Regulatory Commission would provide a go-ahead and what entity would have authority to provide power to the PJM grid.
During Friday’s evidentiary hearing, power company business development director David Pinter acknowledged that negotiations with ETEM could end without agreement on a letter of intent.
“I mean, we think there’s a path forward, or we’ve been counseled that here’s how you do it. But you know, at any point, there could be something that comes up that we can’t get around,” he said.
“If it makes sense to move forward, we will say it makes sense, and we’ll try to send the LOI up for approval. But there’s no guarantee that you make it to the finish line just because you started down the surcharge.”
If the companies can reach an agreement, the Public Service Commission’s order filed Monday evening calls for them to return to discuss approval of the proposed surcharge.
The three-member commission concluded “the proposed rate surcharge will not be charged unless and until the Companies enter into an LOI with ETEM that is approved by the Commission.”
The power companies want to be sure that the plant doesn’t degrade and that employees remain available in case they decide to run it. But they do not explicitly intend to run the plant during the analysis period. It would be on pause.
The proposal is for at least a $3 million monthly surcharge over 12 months, a total of $36 million, to assure the plant remains operational. That amount could be more if there are additional costs identified.
Within 30 days, the Public Service Commission ordered the power companies to return to file a status report on negotiations.
One of the organizations that has been skeptical of the proposed surcharge is the West Virginia Energy Users Group, which includes some of the state’s largest industrial power customers.
That organization said it is still evaluating the commission’s order but takes some solace that the PSC order appears to defer authorization of the surcharge on customers until the power companies present the letter of intent for review and approval.
“But we are disappointed that at least by implication the Commission seems to agree that the costs and risks of the ongoing evaluation of Pleasants are too great for First Energy shareholders to bear, but are perfectly acceptable to foist upon ratepayers who have already borne nearly a quarter billion dollars in rate increases in a little over a year, including manufacturing and industry responsible for thousands of jobs and hundreds of millions of dollars in payroll, tax, and other economic contributions to the state,” said Derrick Williamson, executive director of the Energy Users Group.