FERC denies Mon Power’s Purchase of First Energy’s Pleasants Power Plant

This is a follow-up story to one we did in February 2017, entitled “Could Pleasant Power Plant Sale to Mon Power Risk Raising WV Electric Bills?” At that time we interviewed Cathy Kunkel of West Virginians for Energy Freedom who told us that Mon Power, along with another first Energy Corporation subsidiary, Potomac Edison, were advertising for power plants to purchase, and had written a request for proposal, or RFP in such a way as to guarantee that the Pleasants Power plant would be the only bidder to qualify. The Pleasants Power Plant is owned by AE Supply, which is another subsidiary of First Energy, Mon Power’s parent corporation.

Kunkel said First Energy wanted to dump the unprofitable Pleasants Plant on Mon Power so that Mon Power’s customers would absorb the losses from that plant instead of First Energy stock holders. Kunkel said the purchase would end up costing Mon Power customers hundreds of thousands of dollars, and her group would oppose the sale.
In March of 2017,we spoke with Todd Meyers, a spokesperson for Mon Power who denied that their request for proposal to purchase a 1300 megawatt power generation plant was rigged to purchase the Pleasant Power Plant, and that other plants were welcome to throw their hats into the mix.

In March, Mon Power, as predicted by Kunkel, chose to purchase the Pleasants Power Plant and assume the liabilities of that plant which amounted to a promissory note to another First Energy Subsidiary, AE Supply in the amount of 142 million dollars. On March 7th, Mon Power applied to the Public Service Commission of West Virginia for approval of the sale. Hearings were held in the fall of 2017, but no decision has yet been announced on that application, as well as filing a application to the Federal Energy Regulatory Commission, or FERC who also needed to approve the sale.

FERC issued its decision on January 12th which was an “Order Rejecting Disposition and Acquisition of Generation Facilities and Dismissing Assumption of Liabilities”
In a unanimous decision by the 5 FERC Commissioners – four of whom were appointed by the current President, according to west Virginians for Energy Freedom – FERC concluded: “We deny without prejudice authorization for the proposed transaction because Applicants have not demonstrated that it is consistent with the public Interest. We also dismiss Mon Power’s request for (a) section 204 authorization to assume liabilities as moot.”

In its decision, the FERC Commission stated that “Applicants have not demonstrated that the proposed transaction will not result in inappropriate cross subsidization. Accordingly, we deny authorization for the proposed transaction.” They did make the decision “without prejudice” which could in effect allow Mon Power to start over and issue a new request for proposal, but any new proposal to purchase a power plant needed to be more specific as to capacity, fuel type, plant technology and transmission requirements. Any new RFP would also have to avoid being written to exclude other products that could fill the company’s needs, as this one did.

The Mon Power spokesperson had told us during their March Interview all bidders must be located in the Mon Power APS Zone, which he had defined as being West Penn Power’s area in Pennsylvania, Mon Power’s area in West Virginia and Potomac Edison’s area in Maryland and the Eastern Panhandle of West Virginia. According to the FERC Decision, such restrictions cannot be placed in a request for proposal.
A link to the entire 34 page FERC decision is included with this story on our website, alleghenymountainradio.org.

The West Virginians For Energy Freedom press release on this decision may also be found here:  http://energyfreedomwv.org/news/ferc-decision-firstenergy

A link to the actual FERC Decision can be found here.  1-16-18 FERC Decision – Mon Power-Pleasants Power Plant Purchase