UPDATE: WVCAG tries to pump the brakes on AEP's Mitchell Plant a - WOWK 13 Charleston, Huntington WV News, Weather, Sports

UPDATE: WVCAG tries to pump the brakes on AEP's Mitchell Plant acquisition

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Update, July 18:

The battle between American Electric Power and the West Virginia Citizen Action Group over AEP’s March 4 attempt to partially acquire the Mitchell Power Plan has been ongoing for more than a month, and is still far from over, shots from all direction have been fired this week.

The fight over the Moundsville plant began June 9 when WVCAG asked the West Virginia Public Service Commission to suspend the case until AEP subsidiaries Appalachian and Wheeling Power look into purchasing other power plants for sale. The PSC finally responded with a July 10 order allowing American Electric Power 30 days to offer testimony regarding purchasing other power plants for sale as well as the impact of the new EPA carbon rule on selling the Mitchell Plant to Wheeling Power.

Then, on July 15, AEP responded with an order stating that the company would offer testimony on both issues, adding that they intended to file the testimony by July 18 as to not delay the case. Arguing that end-of-year deadlines for some FERC rules necessitated a timely end to the case, AEP suggested that all other parties should be required to file testimony by July 25, rebuttal to their testimony should have an Aug. 8 deadline and the PSC should issue its dispositive order by Oct. 31.

Two days later, July 17, the Consumer Advocate Division and PSC Staff both responded, both arguing that there is no need to rush the case. CAD shot at AEP in its response, stating that the company continues to “harp on an artificial end-of-the-year deadline that simply does not exist.”

And later that day, AEP filed a correction to their initial filing, which included an analysis of the cost-effectiveness of buying the Mitchell Plant as opposed to building a new natural gas plant. Originally, AEP stated that Mitchell was $446 million cheaper than a new gas plant would be, but in their response said that there had been an $86 million error in calculations, narrowing the difference to $360 million.

“In other words, the Mitchell Portfolio is $360 million less expensive than the 780 CC (natural gas plant) Portfolio,” the filing reads.

UPDATE, June 30:

American Electric Power’s March 4 proposal for Appalachian Power and Wheeling Power to take over 50 percent of the Mitchell Power Plant in Moundsville is still a major topic of conversation for many.

The WV Citizen Action Group filed a motion with the West Virginia Public Service Commission on June 9 asking the commission to suspend the case until APCo and WPCo produce an economic analysis of the cost of purchasing the relevant Duke and AES plants.

It has since received responses from several entities.

On June 17, the PSC Staff released a response agreeing with the WVCAG.

“Staff agrees with the (PSC Consumer Advocate Division) that the Companies must consider all the options for meeting any generation requirements of WPCo,” the response reads. “Staff also agrees with the CAG that the Companies should be required to submit testimony that it has considered the potential of acquiring certain Duke or DPL assets and a showing of the comparative economic analysis of purchasing the Mitchell plant as opposed to any of the relevant Duke or DPL assets.”

Only two days later, APCo and WPCo shot back with a request for denial, submitting that WVCAG’s proposal to undertake investigations on the basis of “vagrant ideas and erroneous assumptions entertained by WVCAG … would be a bizarre way to proceed with this case.”

“It is neither necessary nor proper to send the Companies off upon a quest that may or may not be practical, or even possible, simply because it strikes the fancy of WVCAG or the Staff,” the response reads. “Contrary to WVCAG’s assertion, both the Companies and their customers stand to be adversely affected by the stay that WVCAG has requested.”

In the response, the companies did acknowledge WVCAG’s right to pursue discovery concerning the companies’ proposal, but continued to fight back against the proposal.

However, APCo and WPCo also stated: “What WVCAG does not have the right to do is jump to conclusions and ask the Commission to jump along with it and take hasty action on the basis of assumptions founded on newspaper articles and other hearsay.”

The companies went on to fire shots at the WVCAG and the PSC Staff.

“WVCAG and the Staff do not appear to understand either the realities or the technicalities of the Duke (or, for that matter, the Dayton Power) asset sale process,” the response continued.

The companies continued to explain the complexities and processes of buying and selling a generation facility in the response.

On June 27, WVCAG responded to APCo and WPCo, in which it states that AEP is completely ignoring the “inherent thrust” of the motion. 

“The purpose of CAG’s motion was to require AEP to do the due diligence they should have already done: to have examples of comparable generation facilities’ prices, show if the facilities would be appropriate, and explain why or why not,” the response reads. “Such comparison will give the context of the current market for generation facilities that is needed to determine whether transferring the Mitchell plant at the proposed price is just, reasonable, and in the public interest.”

WVCAG continued to fire back at the shot APCo and WPCo took at the group's competence.

“AEP describes in its response the sort of buyers it believes Duke or Dayton was looking for and the due diligence process for purchasing a generation facility,” the response reads. “CAG is pleased that AEP is familiar with the process, but AEP has apparently never attempted to participate in that process with Duke or Dayton, despite the well-publicized sale of those companies’ generation assets.”

Original Story, June 12:

American Electric Power’s latest attempt at acquiring half of the Mitchell Power Plant in Moundsville is causing controversy among industry experts.

Appalachian Power previously sought approval to obtain 50 percent of the plant in 2013, but because the company is regulated in both West Virginia and Virginia, the request required approval from both the West Virginia Public Service Commission and the Virginia State Corporation Commission, who denied the proposal in December.

On March 4, however, AEP subsidiaries APCo and Wheeling Power Co. — which is regulated solely in West Virginia — submitted a new request to the PSC for WPCo to control half of the plant. The Ohio-based AEP Generation Resources controls the plant. AEP Generation Resources is a competitive company within American Electric Power.

The proposal has received criticism from several people who say that the transfer will increase electricity rates to consumers.

Although Wheeling Power Co. would control the plant, Appalachian Power Co. customers would share the cost because the PSC regulates both companies under one electric rate, according to a statement released by Energy Efficient WV.

“Appalachian and Wheeling Power customers will pay for the cost of owning and operating the Mitchell plant for the rest of its useful life,” the group wrote in its statement.

Derrick Price Williamson, an energy and public utility attorney, also condemned the proposal at the June 9 Manufacturing Leadership Summit at Glade Springs Resort in Daniels.

“If (AEP) acquire(s) the Mitchell asset, it would translate to about $113 million increase in standard base rates,” Williamson said.

The WV Citizen Action Group also filed a motion on June 9 asking the PSC to order APCo to investigate purchasing power plants that Duke Energy and AES Corp. in Ohio are offering for sale as an alternative.

“... Appalachian and Wheeling Power are rushing to purchase this plant from another AEP affiliate without considering other available plants that may be less expensive for ratepayers,” said Emmett Pepper, EEWV executive director and attorney for WV-CAG.
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