FirstEnergy Customers in Eastern Panhandle Give Commissioner McKinney an Earful

Keryn has a great account of the PSC’s public hearing on FirstEnergy’s 17.2% rate increase.  Poor Commissioner McKinney had to handle the hoi polloi all by himself.  He didn’t do such a great job.  Despite the fact that all the people testifying against the rate increase were residential customers, and the residential rate increase they face is 17.2%, Commissioner McKinney kept interrupting people to insist that they should be using the 14.3% figure that is the average of all classes of customers, residential, industrial and commercial.

Chairman Albert appears to be hiding from the public and hasn’t been attending these public hearings.  He claims that several irate AEP customers threatened him at hearings back in 2011, and he can’t stand the heat.

I have been following the written comments that the WV PSC has received about the FirstEnergy rate increases.  Most people submitting comments don’t have a clear idea of what is behind this huge increase request.  About half of the rate increase is stranded costs for the three obsolete and expensive coal-fired power plants that FirstEnergy has had to close in WV.  These plants simply could not compete in the marketplace for electricity.  FirstEnergy wants its WV rate payers to pay the costs of closing these plants as well as any other capital costs that they would otherwise have to write off from their balance sheet.  This is just another rate payer subsidy to the coal industry and coal-fired power companies.

This rate increase request also converts an existing surcharge for the Harrison boondoggle into a permanent part of FirstEnergy’s rate base.  The surcharge even included a guaranteed return on equity, this conversion will not actually raise rates.

The Harrison boondoggle does contribute to the increase, however, because it includes the costs of the 50 employees that FirstEnergy agreed to hire to get the PSC staff and the Utility Workers Union of America Local 304 to support the Harrison settlement.

And, of course, the rate increase includes all the costs associated with fixing FirstEnergy’s billing disaster.  In its general investigation, the WV PSC decided to force the same customers who were scammed by FirstEnergy to pay for fixing a mess that FirstEnergy created.  In its general investigation of FirstEnergy’s failed distribution system maintenance, the PSC also decided to force rate payers to pay for right-of-way maintenance that FirstEnergy had neglected for years, if not decades.

So about half of FirstEnergy’s 17.2% residential rate increase (except for the closed coal plant charges) is directly the result of WV PSC gifts to FirstEnergy.

No wonder FirstEnergy’s customers are angry whenever they see Commissioners at public hearings.

2 thoughts on “FirstEnergy Customers in Eastern Panhandle Give Commissioner McKinney an Earful

  1. Bill is there anyway you could put this and other posts in local papers. The vast majority of fe customers dont even know about the rate increases.

    • Derrick, I claim no copyrights to anything on The Power Line. You are free to use all information here. You can cut and paste the whole post if you like. I would like a credit or a link, but even that is not necessary.

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