Richard Baudino, consultant for the West Virginia Energy Users Group, which represents several large manufacturers across the state, said his organization supports the concept of special power contracts for large industrial users.
However, he said the PSC has an obligation to ensure these special contracts are fair, reflect reasonable risk and cost expectations and don't have an adverse effect on other ratepayers.
Baudino said the Felman plan was "fatally flawed" and "unacceptable as proposed" because it allows the company to maintain a guaranteed profit margin as long as it is operating.
"West Virginia ratepayers, and particularly other West Virginia businesses, should not be required to support a rate of return for Felman's investors," he said. "Such a proposal relieves Felman's management of the responsibility for operating its business in a prudent and profitable manner."
The PSC staff and Consumer Advocate Division analysts said they do not believe Felman could not continue operating as a viable business without the new rate plan.
They cited statutory guidelines that say a company must demonstrate its viability as a business in order to be granted a special rate -- something Felman has not done, they said.
Another concern the analysts had was a portion of Felman's proposal that allows it to carry over unused discount amounts from one year to the next.
Ferguson said that meant if Felman had two or three good years where it paid a higher rate under its plan, then saw a large decline in commodity prices the next year, it could get anywhere between a $19 million to $28.5 million discount on its power bill that year.
"This could mean that Felman would go a full year or more without having to pay an electric bill," Ferguson said.
"This has the effect of giving (Felman) a "checkbook" and a pen to write an unlimited discount on its electric costs," said Deanna White, financial analyst with the Consumer Advocate Division.
Felman will have the opportunity to submit rebuttal testimony in the case later this month.
The PSC will hold formal hearings on the case Dec. 9 and 10 at its offices in Charleston.