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Groups call for reconsideration of power rate increase

CHARLESTON ­– Groups opposed to efforts by Appalachian Power and Wheeling Power to keep three of its power plants operational over the next 19 years want a do-over of a state regulator’s decision to support those plans.

West Virginia Citizen Action Group, Solar United Neighbors and Energy Efficient West Virginia filed a petition for reconsideration Friday with the West Virginia Public Service Commission.

The groups are requesting the PSC reconsider its order issued Oct. 12 approving a plan by Appalachian Power and Wheeling Power to make environmental improvements to the Amos Power Plant in Putnam County, the Mountaineer Power Plant in Mason County and the Mitchell Power Plant in Marshall County.

The improvements would keep the three plants operating until at least 2040.

The companies are seeking a 3.3% increase for West Virginia ratepayers to help subsidize environmental improvements at the three plants after regulatory agencies in Kentucky and Virginia declined requests to help shoulder the financial burden for the improvements. The improvements include changing how plants dispose of coal ash and how wastewater is discharged from plants.

The PSC would still need to approve the rate increases, though the surcharge increase for Mitchell was approved in August in an earlier PSC decision.

Attorneys for West Virginia Citizen Action Group, Solar United Neighbors, and Energy Efficient West Virginia allege that the power companies didn’t provide adequate public notice of the fee increases. Appalachian Power and Wheeling Power filed a petition Sept. 8 with the PSC to re-open the August case, with the PSC’s updated decision coming 35 days later.

Emmett Pepper, legal and policy director for Energy Efficient West Virginia and one of the attorneys representing all three groups, said Appalachian Power and Wheeling Power informed the PSC and the parties in the case as early as Sept. 2 that the cost to state taxpayers for the environmental upgrades for the three plants would increase from $23.5 million to $48 million. Pepper argued that price doesn’t include other costs.

“The potential for all of these costs to be passed on to West Virginia customers was not revealed in the Companies’ filing, and the public was never notified of such costs in advance of the Commission’s October 12 Order that it would make the recovery of such costs from West Virginia customers a virtual inevitability,” Pepper wrote in last Friday’s filing. “$48M is not the correct number, as it fails to include several substantial costs that the Companies will be passing on to customers to complete the retrofits.”

Because the cost to West Virginia consumer could be more than $48 million, Pepper believes that PSC rules that require utilities publicize the amount of rate increases through legal ads in newspapers to the public are in effect. Pepper also said the legal ad also didn’t include information on how the public could weigh in and the company didn’t mail notices to customers.

“… The newspaper notice did not include instructions on how to protest the rate increase or make a statement at a public hearing — indeed, the Commission never did provide public notice of the public hearing that occurred on September 24th,” Pepper wrote.

Pepper accuses the PSC of violating state and U.S. constitutional rights to due process because of the condensed timeline between reopening the case, the public and evidentiary hearings, and the new order. The companies said they needed a decision by or before Wednesday, Oct. 13, when the state Department of Environmental Protection would need a decision from the companies on whether to start the retirement process for one or more of the three plants by 2028.

Pepper singled out the Mitchell Power Plant, which is half-owned by Kentucky Power. While the West Virginia PSC approved the environmental improvements and surcharge to begin work at Mitchell, Kentucky’s PSC turned down Wheeling Power’s surcharge request. Pepper said the PSC exceeded its statutory authority in requiring West Virginia customers foot 100% of the bill for a plant the state only gets half the benefit from.

“It is per se unreasonable and anathema to fundamental principles of monopoly utility regulation for the Commission to require Wheeling Power’s captive customers to pay rates that includes both recovery of and investment in plant equipment owned by a non-jurisdictional utility that is not needed to provide energy or capacity to Wheeling Power’s customers,” Pepper wrote.

“It is further unreasonable to lock Wheeling Power Company on the path to ownership of Kentucky Power’s 50 percent undivided interest in the Mitchell Plant without a record providing substantial evidence that public necessity warrants acquisition of new capacity and energy resources, and that Kentucky Power’s share of the Mitchell plant represents the lowest cost and lowest risk resource available at a competitive price,” Pepper continued.

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