The news came this morning via this press release from FirstEnergy:
FirstEnergy Corp. (NYSE: FE) subsidiaries Mon Power and Potomac Edison, along with the majority of the parties to the companies’ generation transaction proceedings involving the Harrison Power Station, today filed a comprehensive settlement agreement with the Public Service Commission (PSC) of West Virginia, which, if approved, would be expected to reduce an average residential customer’s electric bill by about $1.50 a month.
We’ve got an initial crack at a story online here, and you can read the settlement agreement for yourself here. Previous coverage of this case is available here, here and here. Holly Kauffman, president of FirstEnergy’s West Virginia operations, said:
We appreciate the support of the parties in reaching this agreement, and look forward to implementing our cost-effective plan to provide our customers with electricity generated in the heart of our service territory. Having 100 percent ownership of the Harrison Power Station will help shield our customers from unpredictable spot market prices and help provide greater rate stability for years to come.
As a news consumer, I’m certainly wishing today that the great Pam Kasey had not left The State Journal, because Pam would be all over this story — and reading her coverage would let me steal lots of ideas for questions to ask in preparing a piece for tomorrow’s Gazette. But there are a few points to keep in mind:
— The deal still needs to be approved by the West Virginia Public Service Commission, and at least one party that’s been very opposed to the transaction — the West Virginia-Citizen Action Group — remains opposed.
— Initially, FirstEnergy had proposed a rate hike amounting to $63 million annually for Mon Power customers, to cover the costs of the Harrison Plant deal. Now, the company is agreeing to instead reduce rates by about $16 million a year, which amounts to $1.42 per month for residential customers. But those rates aren’t set in stone forever, and they could change starting in 2015, depending on any variety of factors.
— While perhaps at least temporarily improving the rate picture, the settlement does not really address the concerns from groups like the Sierra Club (which has tentatively approved the settlement) or WV-CAG that the plant transfer would further lock West Virginia into coal-fired power, at a time when a variety of factors are chipping away at coal and making it less competitive.
— FirstEnergy touts all kinds of things it’s going to do under the settlement — creating 50 new jobs in West Virginia, giving money to teach energy efficiency in our public schools, etc. — but the bottom line is that the energy efficiency improvements FirstEnergy is committing to here (reductions of 0.5 percent between 2013 and 2018) amount to not that great of a jump compared to what other states are doing.
Also worth remembering is that this is one of two coal-fired plant transfer cases pending before the West Virginia PSC. Recall that Appalachian Power’s proposal concerning its John Amos and Mitchell plants received a major setback in Virginia. West Virginia utility commissioners have asked for more information about that ruling, and they’ve moved back the dates for legal briefs in that case … so stay tuned.