January 4, 2022 - The West Virginia Public Service Commission approved a requested rate increase, while a newer request could result in higher rates down the road.
The PSC issued an order Dec. 29 approving a requested increase that requires Mon Power and Potomac Edison enter into a purchased power agreement with the Longview Power Plant in Monongalia County.
The three-member PSC approved a $19.6 million rate increase for Mon Power and Potomac Edison, both subsidiaries of FirstEnergy, beginning as of Saturday. The $19.6 million rate increase is before excess accumulated deferred income taxes offsets are factored in.
The rate increase, which represents a 1.5% increase for customers, will allow Mon Power and Potomac Edison to recover costs for fuel, purchased power agreements and the costs of transmission. The company attributed costs to the increasing price of commodities, such as coal and purchased power from power plants, as well as charges assessed by PJM Interconnections, a wholesale energy transmission company serving 13 states and Washington, D.C.
Attempts by Marion County-based Grant Town Power to have the PSC enter into a buyout proposal with Mon Power and Potomac Edison were rejected by the commissioners. The companies have a purchased power contract with Grant Town through 2036.
“Eliminating existing capacity resources will only exacerbate the shortfalls faced by the companies,” the PSC wrote in its order. “We do not find sufficient evidence that eliminating capacity that the companies are entitled to by contract will be of benefit when doing so will drive the companies to an even greater shortfall from PJM obligations.”
The commissioners also rejected a request from environmental and energy efficiency groups such as West Virginia Citizen Action Group, Energy Efficiency West Virginia and Solar United Neighbors to order the companies to reinstate and provide access to energy efficiency programs. The groups argued that reinstating these programs would also reduce fuel costs.
“We are disappointed that the commission was unwilling to consider energy efficiency in a case that was so focused on market volatility for fuel prices,” said Emmett Pepper, policy director for Energy Efficient West Virginia. “Energy efficiency is one of the best solutions to address those costs, and we view this decision as a missed opportunity to reduce fuel costs and help customers lower their energy bills by reducing energy waste and improving home efficiency.”
The approved order came 13 days after Mon Power and Potomac Edison announced they applied to the PSC for approval of a $142 million multi-year environmental compliance program for improvements for the Fort Martin Power State in Monongalia County and the Harrison Power Station near Shinnston.
“The proposed upgrades will create local jobs and allow us to continue to operate our plants into the next decade for the benefit of our customers in West Virginia, while also minimizing their impact on the environment,” said Jim Myers, president of West Virginia operations for FirstEnergy, in a statement last month.
The cost to consumers, if approved, would be 51 cents per month for residential customers. The improvements would be completed by 2025 and keep the two power plants operating into 2035 and 2040.
Mon Power serves 395,000 customers in 34 counties while Potomac Edison serves 151,000 customers in the Eastern Panhandle.