CHARLESTON, W.Va. -- A West Virginia group has filed a formal objection to a proposed $1 billion deal to transfer ownership of a Harrison County power plant.
The West Virginia-Citizen Action Group said Monday it filed the objection on Friday with the W.Va. Public Service Commission. It came days after FirstEnergy announced the deal involving its subsidiaries Mon Power and Potomac Edison, and affiliate Allegheny Energy Supply.
The parties have requested that the West Virginia regulators approve the settlement by Friday. The Federal Energy Regulatory Commission already has approved the transaction.
Labor and business groups signed off, and the Sierra Club gave its tentative approval of the deal, which was announced last week after much scrutiny.
Under the agreement, Mon Power will spend $1.1 billion to buy the remaining 80 percent of the 1,984-megawatt plant that it does not currently own. Mon Power will sell 8 percent of its interest in the Pleasants Power Station to Allegheny Energy Supply, another FirstEnergy affiliate.
The West Virginia-Citizen Action Group argues that the price that ratepayers are being asked to pay is too high and that acquiring the plant will increase long-term price risks for ratepayers.
The company has said the transaction is expected to reduce average customers' electric bills by about $1.50 per month. The group referred to the decrease as "classic smoke and mirrors."
"What's really going on is that ratepayers are being asked to assume all the costs and risks of a 40-year-old coal plant for the next 27 years so that Allegheny Energy Supply's shareholders don't have to," Gary Zuckett, Executive Director of WV-CAG said in a news release. "This is not a good buy for West Virginia."
The group also criticizes the company for its plan to generate the majority of its energy from two coal-fired power plants that were constructed five years apart, calling it "an extreme case of a utility putting all of its eggs in one fuel basket."
FirstEnergy has argued that the deal would ensure Mon Power has adequate resources to meet its demand through 2020, providing about 1,500 megawatts of additional power, or enough to supply about 1 million homes. The company supplies electricity to both its 385,500 customers and 132,000 Potomac Edison customers in the state's Eastern Panhandle.
"Just like any settlement agreement, there's a lot of negotiating, a lot of back and forth, give and take," said Todd Meyers, a FirstEnergy spokesman. "We all came to an agreement that people were comfortable enough with to sign and forward along to the PSC for recommendation."
The deal includes the companies' promise to bring at least 50 more jobs to the state and provide $3.8 million in credit and contributions for economic development projects, low-income utility assistance and other programs.