Harrison Scheme Case Hearing Ended Friday

Pam Kasey has an account of day three of the WV PSC hearing last Friday at which intervenor experts were cross-examined on their testimony.

During the three days of testimony last week, we learned more details, but nothing came out changed earlier conclusions based on written testimony submitted earlier.

It is clear from his questions of witnesses last Friday, that Chairman Mike Albert fundamentally (willfully?) misunderstands the points being made by intervenor experts about the role of energy efficiency in resolving FirstEnergy’s capacity shortage in WV.  Chairman Albert asked expert Cathy Kunkel if she contended that Mon Power could meet all its capacity shortfall from efficiency investments.  Why would he ask such a question if he had actually read her testimony?  Here it is, right there on page 10 of her testimony:

Q. WHAT FRACTION OF THE COMPANIES’ CAPACITY SHORTFALL COULD BE MET THROUGH ENERGY EFFICIENCY BY 2026?
A. Under this scenario, energy efficiency would save 3 18 MW UCAP [unforced capacity] by 2026 – or more than a quarter of the Companies’ actual capacity shortfall of 1211 MW.

So the real question is: what movie is playing in Mr. Albert’s head?  He certainly isn’t evaluating the facts in the case.  It is clear from her testimony that Ms. Kunkel never claimed that efficiency investments would ever eliminate all of Mon Power’s capacity shortfall.

Last week’s testimony did confirm a number of points that critics of the Harrison scheme have already pointed out:

  • Expert Billy Jack Gregg clearly demonstrated that investing in natural gas generation for part of Mon Power’s needs is a “no-brainer” when compared with buying the Harrison plant.
  • Whether or not Mon Power officials actually negotiated the purchase transaction with Allegheny Energy Supply is a major issue in this case, because evidence of an arms length transaction is required by WV law before the PSC can approve any transaction like this between subsidiaries of a single holding company.  Company witnesses testified that they never raised the strongest arguments against the outrageous price AES wanted for the Harrison plant.  The strongest of those arguments was the fact that the PSC, in approving the merger between Allegheny Energy and FirstEnergy, had ordered that FirstEnergy could never recover any accounting premiums created during the merger.  Mon Power officials directly involved in the so-called negotiations testified that they never discussed this issue with AES or FirstEnergy.  Oops.
  • FirstEnergy employees have dug in their heels against pursuing free market solutions.  They refuse to consider simply issuing a request for proposals to find the least expensive way of meeting their capacity needs.  They claim that would take almost a year.  Well, FirstEnergy will have wasted almost a full year with their phony “resource plan” they cooked up last August and the charade of the Harrison “sale.”  Besides, as everyone has pointed out throughout the PSC case, low capacity and electricity costs on PJM markets means that Mon Power can continue to buy capacity on PJM markets for the next four years at costs lower than the cost of transferring Harrison to Mon Power.

Transcripts of last weeks hearings will be available by June 14.  The Commission ordered parties to the case to file briefs by July 9, with reply briefs due July 19.  Unlike high voltage transmission cases, which operate on a 300 day deadline, the Commission can take as long as they need to issue a final order in this case.

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