Instead of simply rubber stamping FirstEnergy’s settlement proposal on the Harrison case, the WV PSC has wisely begun the process of scheduling a hearing on the issues involved. Here is what they said in yesterday’s order:
The Commission appreciates the continuing efforts made by the Stipulating Parties, even after the close of the record in this matter, to offer compromises and counter proposals in a concerted undertaking to develop the Joint Stipulation that is now before us. We also understand the desire of the Stipulating Parties to move this matter to resolution with utmost speed. The Commission shares that desire; however, we will chalk up the suggested decision date of “no later than August 30, 2013,” to “corporate enthusiasm.’’ The issues to be decided in this proceeding are too numerous, too significant from a rate making and cost of service perspective, and too important to current and future ratepayers, Mon Power and PE, and the economy of the State to suggest that they be treated in anything other than a detailed and thoughtful manner by the Commission.
So the Commission has resisted FirstEnergy’s “corporate enthusiasm” and is actually acting like a regulatory body. The Commissioners want the hearing to happen before September 24.
In its order, the Commissioners also included a long list of the issues presented in the case:
The evidence from the hearings and the arguments contained in the briefs combined to create a tangle of difficult, complicated and (at least insofar as the parties are concerned) interrelated, overlapping and contested issues — issues that cover a range of disagreements, including
- The need, cost, timing, and possible benefit that might flow from requiring Mon Power to issue a request for proposal (RFP) seeking alternative or additional sources of generation to supplement or replace the Harrison proposal;
- The condition, effectiveness, operating profile and ease of fuel access and availability for Harrison and Pleasants;
- The arms-length nature of the negotiations between Mon Power and its affiliate,AE Supply, regarding the sale of the remaining interest in Harrison to Mon Power;
- The extent to which, if any, that AE Supply has an obligation, or has committed, to manage Harrison for the benefit, or at least not to the detriment, of Mon Power;
- The reasonableness and accuracy of the valuations of the Harrison and Pleasants power stations performed on behalf of Mon Power by Navigant Capital Advisers, LLC;
- The impact of current and long range prospects for the price and availability of natural gas and the likelihood that the substantial shale gas discoveries and related innovative drilling techniques and activity will continue to positively affect the price and availability of gas for electric generation;
- The determination and assessment of the values (Fair Market Value [FMV], AE Supply Book Value, FirstEnergy Book Value, Original Cost Book Value or other value above or below FMV or Book Value) for the sale of Harrison;
- The estimated cost of future generation for the Companies under the Transaction, particularly given the current uncertainty related to legislation or regulation limiting carbon emissions on existing generation stations and the cost of compliance with that limitation, as opposed to the cost of alternatives that might be available to Mon Power based on different mixes of generation;
- The need for, effectiveness and availability of possible Energy Efficiency and Demand Response programs as a replacement for or offset to installed generation resources that the Companies may require; and
- The implications, on the proposed Harrison Transaction and on the ratemaking that might flow from that Transaction, of the Commission and the Federal Energy Regulatory Commission accounting policies and rules related to the purchase of electric plant, the regulatory accounting rules applicable to affiliated transactions, prior commitments regarding Acquisition Premiums flowing from the acquisition of the Allegheny Power System by FirstEnergy, and certain generally accepted accounting principles, rules and treatments under purchase accounting that were accorded the acquisition by FirstEnergy (Monongahela Power Company, et al.
Clearly the Commissioners have been paying attention. They need to continue their vigilance to prevent the acceptance of the seriously flawed settlement proposal that FirstEnergy has submitted.