George Hohmann covered some different angles in APCo’s spin campaign yesterday at Charleston Newspapers. Hohmann’s story fleshes out the details of APCo CEO Patton’s account of the dissolution of the AEP power pool and AEP’s public spin. Patton portrays the dumping of coal-fired generation on WV as a way of increasing WV’s generating capacity.
Because the WV PSC has no least cost planning process, APCo is not required to provide a comprehensive analysis of all options for meeting any future problems it identifies. Because APCo and Wheeling Power, AEP’s WV subsidiaries, have never had to file a least cost plan, also called an integrated resource plan, in WV, the WV PSC has no prior knowledge of various strategies for resolving APCo or Wheeling Power generation deficits that may result from the dissolution of the AEP power pool.
Instead, Mr. Patton simply presents AEP’s plan and the WV PSC is stuck with a “take it or leave it” situation. Instead of having comprehensive information on which to base its decision, the PSC is completely dependent on AEP’s analysis.
Mr. Hohmann concludes his story with a quote from Mr. Patton that reflects exactly what I have been saying here on The Power Line for the last three years:
“There’s a certain level of risk where 71 percent of your generation is from coal and a significant portion of your operation is dictated by fuel cost,” Patton said. “There’s an inescapable amount of uncertainty that’s going to be there.”
Therefore, even if Ohio agrees with Appalachian’s plan, “I think we and our commissions and stakeholders will have to look at how to manage risk going forward,” he said.
The problem in WV is that the WV PSC lacks an important tool for managing that risk: Least Cost Planning.