WV CAG Files Common Sense Motion in AEP Mitchell Case

Earlier in the week, the WV Citizens Action Group filed a motion (the motion takes a while to download, so be patient) to stay WV PSC case 14-0546-E-PC, in which AEP is trying to cram half of its Mitchell coal fired power plant down the throats of Wheeling Power and Appalachian Power customers.  In earlier testimony in the case, AEP officials testified that they wanted to “sell” the half interest in Mitchell from their AEP Generation Resources subsidiary to their Wheeling Power subsidiary for about $710 per kilowatt of capacity.  AEP claimed that this was a good deal, and there weren’t any other alternatives.  It turns out there may be good alternatives, at much lower cost.  Duke Energy and Dayton Power and Light are getting ready to sell a number of power plants in OH, AEP’s home territory.  And AEP actually owns a share in some of the Duke plants.

Well, they were apparently wrong.  Here is what WV CAG said in its motion:

AEP has failed to adequately consider options other than purchasing the Mitchell Power Station. In its “Updated Plan to Serve the Load of Wheeling Power Company and Petition for the Commission’s Consent and Approval to Implement the Updated Plan,” AEP asserts that the proposed “WPCo Mitchell Transfer is far superior to other options that might be contemplated, such as constructing new generating capacity, acquiring existing generating capacity, or procuring long-term contracts for power.” At no time, however, does AEP make any assessment about purchasing the Duke Energy assets.

5. The Duke Energy assets are expected to be sold at a discount to book value. In the first quarter of 2014, Duke wrote down the value of its Midwest generation plants by $1.4 billion to reflect their estimated air value. This is a reduction of more than a third relative to book value of $3.5 billion. This suggests that AEP may have the opportunity to acquire capacity that is less expensive than the Mitchell plant.

6. Dayton Power & Light, a subsidiary of AES, is in talks with prospective buyers to sell its Ohio generation assets, which total more than 3,600 MW of capacity. AEP has also provided no evidence that it has investigated the relative economics of these assets.

The PSC Commissioners will rule on whether to grant the stay and order AEP to seriously investigate the Duke and Dayton plants, either to buy one or more of them, or to arrange to purchase power from the company that does buy them.  We will get to see whether the Commissioners are serious about managing WV’s electrical system efficiently and effectively, or whether they want to allow AEP to dump its obsolete coal burner on WV rate payers, the way two of the Commissioners allowed FirstEnergy to dump the Harrison plant on us.

As we have seen in my other post this morning, AEP is playing all the angles with regulators, including asking for direct rate payer subsidies for its OVEC power pool plants.  OH is supposed to be a deregulated state, but AEP has the audacity to ask the OH PUC to put their OVEC plants back on the rate payer dole.  The Mitchell case in WV is just another part of the AEP holding company monopoly game.

One thought on “WV CAG Files Common Sense Motion in AEP Mitchell Case

  1. Certainly AEP should get points for consistency. However, that consistency continues to be a ratepayes’ expense. I and many others are grateful for intervenors like WVCAG and others across the country who step up and call these Wall Street bandits on their shenanigans. Thanks for posting this.

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