That's according to a recent report from the Institute for Energy Economics and Financial Analysis (IEEFA).
Back in 2013, FirstEnergy, parent company of West Virginia distribution electric utilities Mon Power and Potomac Edison, came up with a bright idea to sell the Harrison Power Station to itself in order to raise cash to shore up its sagging balance sheet. The plant was originally owned by FirstEnergy's competitive electricity supply company, Allegheny Energy Supply. When owned by Allegheny Energy Supply, the plant was required to cover its own operating costs and make any profits by selling electricity into regional markets at a cost higher than its costs to produce the power. However, market prices for electricity began falling due to the glut of cheaper gas-fired generators, making it harder and harder for Harrison to compete and turn a profit. FirstEnergy proposed that Allegheny Energy Supply "sell" the plant to its West Virginia distribution affiliates at a jacked up price. Once Mon Power and Potomac Edison owned the plant, their ratepayers would cover the cost of operating the plant, with electricity sold to the power market at going rates. Except the going rate for power not only didn't produce any profit for the company's ratepayers, it didn't even cover its own operating costs. Therefore, ratepayers of Mon Power and Potomac Edison have been subsidizing the cost of operating the plant at a loss since 2013. The IEEFA estimates that the bill for ratepayers has climbed to $164 million. That equals roughly $130 in extra electric bill charges for every customer of Mon Power and Potomac Edison, paid to cover the losses of operating the Harrison Power Station.
The IEEFA calculated the costs by using monthly reports of operating costs and market prices submitted to the Public Service Commission since 2013. The IEEFA report reveals that the plant has produced a net cost (not benefit) to ratepayers for 28 out of 33 months. And future prospects for the plant turning a profit remain dim.
FirstEnergy "still believes the plant is still a good deal for customers in West Virginia."
Back in 2013, FirstEnergy, parent company of West Virginia distribution electric utilities Mon Power and Potomac Edison, came up with a bright idea to sell the Harrison Power Station to itself in order to raise cash to shore up its sagging balance sheet. The plant was originally owned by FirstEnergy's competitive electricity supply company, Allegheny Energy Supply. When owned by Allegheny Energy Supply, the plant was required to cover its own operating costs and make any profits by selling electricity into regional markets at a cost higher than its costs to produce the power. However, market prices for electricity began falling due to the glut of cheaper gas-fired generators, making it harder and harder for Harrison to compete and turn a profit. FirstEnergy proposed that Allegheny Energy Supply "sell" the plant to its West Virginia distribution affiliates at a jacked up price. Once Mon Power and Potomac Edison owned the plant, their ratepayers would cover the cost of operating the plant, with electricity sold to the power market at going rates. Except the going rate for power not only didn't produce any profit for the company's ratepayers, it didn't even cover its own operating costs. Therefore, ratepayers of Mon Power and Potomac Edison have been subsidizing the cost of operating the plant at a loss since 2013. The IEEFA estimates that the bill for ratepayers has climbed to $164 million. That equals roughly $130 in extra electric bill charges for every customer of Mon Power and Potomac Edison, paid to cover the losses of operating the Harrison Power Station.
The IEEFA calculated the costs by using monthly reports of operating costs and market prices submitted to the Public Service Commission since 2013. The IEEFA report reveals that the plant has produced a net cost (not benefit) to ratepayers for 28 out of 33 months. And future prospects for the plant turning a profit remain dim.
FirstEnergy "still believes the plant is still a good deal for customers in West Virginia."
Todd Meyers, a spokesperson for MonPower, responded to questions about the study by saying the company believes the purchase benefits their customers and that it supports coal mining.
“It continues to provide reliable, low-cost power to our customers, and has preserved the opportunity to use more than 5 million tons of West Virginia produced coal annually, supporting hundreds of coal miners with solid, family-sustaining wages,” he said.
No word on whether Meyers still believes in Santa Claus, the Easter Bunny, and the Tooth Fairy as well, but I recently bumped into a leprechaun riding a unicorn and he told me that he does.
What are customers of Mon Power and Potomac Edison paying for? Are they paying for the electricity they use, or are they paying to subsidize the coal industry? Or are they instead simply subsidizing FirstEnergy's quarterly dividends paid to shareholders?
And guess what? FirstEnergy has recently proposed selling ANOTHER of its competitive coal plants to Mon Power and Potomac Edison, citing the "model" of Harrison as the basis for another "good deal for customers in West Virginia." We can't afford another one of FirstEnergy's "good deals!"
Heads up, West Virginians, we're going to need all hands on deck to stop this one!
What are customers of Mon Power and Potomac Edison paying for? Are they paying for the electricity they use, or are they paying to subsidize the coal industry? Or are they instead simply subsidizing FirstEnergy's quarterly dividends paid to shareholders?
And guess what? FirstEnergy has recently proposed selling ANOTHER of its competitive coal plants to Mon Power and Potomac Edison, citing the "model" of Harrison as the basis for another "good deal for customers in West Virginia." We can't afford another one of FirstEnergy's "good deals!"
Heads up, West Virginians, we're going to need all hands on deck to stop this one!
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