CHARLESTON, W.Va. -- FirstEnergy announced Wednesday morning a settlement with several key interest groups regarding the transfer of its Harrison County power plant to its subsidiary, Mon Power.
The company said the proposal, which still has to be approved by the state Public Service Commission, would end up saving residential customers about 1.5 percent on their monthly power bill.
"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," said Holly Kauffman, FirstEnergy's president of West Virginia operations.
"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," Kauffman said.
Under the agreement, filed Wednesday morning with the PSC, Mon Power will spend $1.1 billion to buy the 80 percent of the Harrison Power Station it does not already own. The transaction will give Mon Power sole ownership of the 1,984-megawatt supercritical coal plant located in Haywood.
The cost of the purchase will be partially offset by the sale of Mon Power's 8 percent interest in the Pleasants Power Station to Allegheny Energy Supply.
Mon Power provides electricity to its 385,500 customers and also to 132,000 Potomac Edison customers in the state's Eastern Panhandle. The settlement allows the company to impose a $113.4 million annual surcharge to pay off the transaction.
However, the company said customers' overall rates would actually go down through the deal.
According to the settlement, the $113.4 million surcharge will be offset by a $129.5 million reduction in the company's fuel costs.