Hoppy Wants Free Market for OH-Based Power Companies, But Not for West Virginians

Yesterday, Hoppy Kercheval weighed in on the repeal of WV’s do-nothing ARPS law.  As Power Line readers know, I have no problem with repeal of the law, as long as net-metering for West Virginians is preserved.

But that is not the issue I want to address in this post.  In his piece, Hoppy expressed this opinion:

Why should the government dictate to utilities where they get their sources of energy?  West Virginia gets 95 percent of its electricity from coal.  It’s a cheap and reliable fuel that keeps energy costs down for consumers, which is why utilities burn coal.

Mr. Kercheval seems to have lots of problems when “government dictates to utilities” and those dictates encourage diversification of WV’s energy resources.

As for his claims that coal is “cheap and reliable,” they are very shaky.  Back in 2012, the WV Legislature passed special legislation which raised rates on AEP’s WV customers for decades because coal supplies dried up on the open market, and coal prices went through the roof.  Instead of applying a 40% rate increase to cover these costs, AEP went begging to the Legislature to saddle their APCo and Wheeling Power customers with decades of debt and interest payments.  In the 2012 legislative session, Republicans and Democrats responded by “dictating” that AEP should get its way.

When the Harrison Power Station couldn’t sell its coal-fired electricity on the open market and FirstEnergy dumped the plant on WV rate payers, I didn’t hear Mr. Kercheval complaining.  The WV PSC’s approval of the Harrison transfer is about as blatant a case of government dictating higher electric rates, by rescuing a power company from the free market, as we have seen in recent years.

If Mr. Kercheval doesn’t like government “dictating” what power companies do, does he think this statute should be repealed?

(b) The Legislature creates the Public Service Commission to exercise the legislative powers delegated to it. The Public Service Commission is charged with the responsibility for appraising and balancing the interests of current and future utility service customers, the general interests of the state’s economy and the interests of the utilities subject to its jurisdiction in its deliberations and decisions.

In exchange for this regulation, the Legislature has granted legally authorized monopoly status to electric utilities owned by Ohio-based holding companies AEP and FirstEnergy.  West Virginians must buy their electric power from these monopolies.  Any business person or residential customer that generates electricity is required to sell that electricity only to the monopoly that is authorized by government to operate in that area.

Mr. Kercheval is concerned only when government “dictates” to monopolies, but is he concerned when government licensed monopolies themselves dictate to West Virginians?

When anyone who talks to you about electricity in West Virginia starts talking about the free market, you know something fishy is going on.  There is no free market for West Virginia citizens who need to buy or sell electricity.  There is only government dictated monopoly.

Mr. Kercheval only wants freedom for Ohio-based monopolies, not West Virginians.

One thought on “Hoppy Wants Free Market for OH-Based Power Companies, But Not for West Virginians

  1. BRAGGING RIGHTS Did you hear my conversation last week (THURSDAY I think) with Kercheval, following his commercial with CHRIS HAMILTON concerning the giveaway to the coal industry? He attempted to hit me with the FREE MARKET CAN DETERMINE ALLOCATION OF RESOURCES. My reply was “Mr. Hamilton was very disingenuous with his position statement and resorted only to attacking and blaming one person, Barack Obama. The market will not determine anything because (fossil) energy users cannot respond quickly enough to changes in the dynamics of the pricing structure. It takes years to transition from one fuel to another for electric generation.” Kercheval cut me off for the 1030 commercial break. Danny Lutz

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