Activists allege coal plant purchase is at bottom of rate hike
CHARLES TOWN – At a Friday meeting convened by the NAACP at Fisherman’s Hall to discuss residents’ complaints about recent Potomac Edison electrical bills, activists with the Sierra Club and Stop PATH encouraged citizens to file protest letters against the purchase of a coal-fired power plant in Harrison County.
Daniel Chiotos, a Sierra Club organizer, called the proposed purchase of the Harrison Power Station by MonPower – which, like Potomac Edison, is a First Energy subsidiary – an “effort to boondoggle the ratepayers.”
The plan in question, which First Energy proposed to the Public Service Commission in November, would have MonPower purchase 80 percent of the 40-year-old power station at a price of $1.1 billion from Allegheny Energy, which is also a First Energy subsidiary. Since MonPower already owns 20 percent of the Haywood plant, this would make it the sole owner.
Chiotos said First Energy is, in fact, asking the Public Service Commission to force the state’s ratepayers to foot the bill for a “purchase,” he described as nothing more than an internal shuffling of resources between subsidiary firms.
He also accused First Energy of also inflating the purchase price of the plant.
“They’re selling it for top dollar,” he said. “You can see plants across the country selling for five times less.”
Charts provided to residents showed the price, per kilowatt, of several recent coal and natural gas plant purchases to back up his claim.
“First Energy’s proposed price is just outrageous,” he said.
Potomac Edison spokesman Todd Meyers disagreed with that assessment.
“We have come up with what we believe is the most cost-effective solution for our customers,” Meyers said. “Coal will continue to be a competitive fuel.”
He explained that First Energy agreed to close three inefficient coal plants in 2011.
Meyers also pointed out that First Energy submitted cost assessments of other options, such as building a natural gas-fueled plant, to add extra generation capacity to fill a large projected shortfall in future electrical supply.
Chiotos said the Harrison plant is no longer able to generate electricity at rates that are competitive in “deregulated” energy states, where customers have the option of choosing between multiple electricity providers. By transferring ownership to MonPower, he argues, First Energy would be able to lock in a rate that would let it continue to operate the Harrison plant at a profit using its status as a regulated monopoly.
“Ohio’s deregulation has led to increased competition in their energy markets, and more natural gas is coming online,” Chiotos said. “Coal power has been much more expensive than gas.”
Chiotos said, as easily-accessible Appalachian coal resources are dwindling and natural gas production is exploding, long-term ownership of a coal-fired plant will saddle ratepayers with higher electrical bills far into the future.
“This locks us into owning a large, coal-fired power plant for 27 years,” he said. “And coal is getting increasingly expensive. They’re proposing an immediate 6 percent increase (now), but this won’t be the only one. There is another rate increase after that, and another increase after that, because we will be locked into this deal.”
Chiotos also pointed to statements made by PSXC consumer advocate Byron Harris, reported in the State Journal in August: “Clearly both FirstEnergy and [American Electric Power] want to put the risk of future environmental costs associated with coal into states where they can recover those costs from captive ratepayers.”
The proposed sale has generated opposition by a variety of citizen groups. So far 445 letters of protest have been sent to the Public Service Commission, with 96 letters being submitted in support of the purchase.
Stop PATH activist Patience Wait said letter writing, organizing and other acts of citizen opposition to the Harrison could stop it from going through.
“We are talking about a giant company, and everybody says, ‘Oh, you can’t do anything about it. It is the utility company,’” she said, arguing that the abandonment of the plan for PATH demonstrated this fact. “We showed that you can stand up to power companies, and you can win.”
“The reason we were able to do that is we had lots of people standing up and making noise about it,” she said.
Chiotos said the Sierra Club hopes the Public Service Commission will reject the proposed sale completely, and instead compel First Energy to subsidize efforts to improve energy efficiency through efforts like weatherizing homes and installing more efficient appliances.
“Power companies have been trying to convince us that it is jobs versus the environment,” he said. “We are looking at creating 19,000 jobs throughout the state through energy efficiency.”
Meyers said energy efficiency alone would not meet the expected energy shortfall.
“We understand that energy efficiency is important, but, by the same token, the energy shortfall is much larger that what we could effect through energy efficiency,” he said.