WV ARPS – The Joke Continues

The other day, I took a look at the 2013 report that the WV PSC files with the WV Legislature concerning progress on the do nothing Alternative and Renewable Portfolio Standard that then-Gov. Manchin pushed through the Legislature in 2009.  It’s all in there, clear evidence that the law was meant to do nothing except suppress the development of renewable power in WV.

By allowing fossil fuel burning, including coal, coal gob and natural gas to generate “alternative” credits that power companies can use to meet the law’s targets, the ARPS eliminates any need to generate or trade in real renewable power credits, such as homeowner solar.  In other states that have real renewable power standards, markets for solar renewable energy credits, or SRECs, allow homeowners and businesses to finance their investments in solar power systems.  Not in WV, because AEP and FirstEnergy don’t need to buy credits from anyone else to meet WV’s bogus “standards.”

Don’t believe me?  Here’s the report:

In 2011, pursuant to the Act requirements, the State’s electric utilities were required to file alternative and renewable energy portfolio standard compliance plans with the Commission for review and approval. The compliance plans were approved for the seven electric utilities in the State, including the two major State electric utilities, the entities that are primarily responsible for implementing and complying with the Act requirements: Appalachian Power Company (APCo) and Wheeling Power Company (WPCo), dba American Electric Power (AEP) (together the AEP Companies) and Monongahela Power Company (Mon Power) and The Potomac Edison Company (PE), both affiliates of FirstEnergy (together the FirstEnergy Companies) and formerly dba Allegheny Power.

According to the AEP compliance plan approved in Case No. 10-1914-E-CP, the AEP Companies intend to meet the portfolio standard requirements through the acquisition of credits from the AEP Companies’ existing qualifying generation and existing purchase power agreements for qualifying wind generation located within the PJM region, and their energy efficiency and demand response programs. The AEP progress reports filed in 2012 and in 2013 show that AEP continues to have a reasonable expectation of achieving the portfolio standard requirements. AEP reported no change in the cost to comply from the information provided in its Commission approved compliance plan.

According to Mon Power and PE’s compliance plan approved in Case No. 10-1912-E-CP, the FirstEnergy Companies planned to meet the portfolio standard requirements through a combination of credits from three Public Utility Regulatory Policy Act of 1978 (PURPA) facilities, including the Hannibal Lock & Dam (Hannibal), a run-of-river project owned by the City of New Martinsville. The Hannibal facility is a Qualifying Facility (QF).

After receiving approval of the Mon Power and PE compliance plan, in Case No. 11-0249-E-P, the utilities filed a petition for declaratory relief and interim relief, seeking a ruling from the Commission that Mon Power was entitled to the credits generated by the QFs pursuant to energy purchase agreements. The Commission granted the City of New Martinsville intervenor status in that proceeding. By an order entered November 22, 2011, the Commission held that the credits from the Hannibal plant belonged to Mon Power. Issues regarding credits from the Morgantown Energy Associates (MEA) and Grant Town waste coal facilities and the Hannibal plant, all PURPA projects constructed in the late 1980s or early 1990s, were the subject of cases pending before the Supreme Court of Appeals of West Virginia in City of New Martinsville v. The Public Service Commission of West Virginia, Case No. 11-1738 and Morgantown Energy Associates v. The Public Service Commission of West Virginia, Case No. 11-1739. The ownership of the credits for the electricity generated from the facilities and purchased by Mon Power under PURPA contracts that predate the Portfolio Act and the certification of the MEA facility under West Virginia law were contested in these cases by MEA and the City of New Martinsville. On June 11, 2012, the Court issued a per curiam decision in which it upheld the Commission ruling that Mon Power owns the credits and the Commission holding that the Commission may certify the MEA facility upon the submission of sufficient evidence by the utilities of the qualification of the facility to meet the Commission Rule requirements to generate credits. The City of New Martinsville filed suit on June 1, 2012, and, later, MEA filed suit on October 9, 2012, in the United States District Court for the Southern District of West Virginia. The City of New Martinsville and the MEA seek a determination that the Commission violated PURPA when it determined that Mon Power owned the credits associated with generation from the three PURPA facilities. Those cases remain pending in federal court.

The 2013 progress report indicates that Mon Power and PE’s compliance plan continues to have a reasonable expectation of achieving the portfolio standard requirements, and Mon Power and PE continue to have the burden of meeting the mandates of the Alternative and Renewable Energy Portfolio Standard. If the federal court alters the Commission ruling on the PURPA credits, then in a future filing Mon Power and PE will be required to submit additional information regarding the supercritical units and/or additional sources of required credits. If Mon Power and PE need to rely on additional/different sources of required credits in the future, Mon Power and PE will need to file a revised compliance plan for Commission approval. Similarly, if the Commission decision is not altered by the pending federal court appeal, the City of New Martinsville will need to file a revised compliance plan for Commission approval.

Translation: no renewable energy credit market in WV before 2025 when the law expires.

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