Welcome to the third issue of WV Energy Consumer Quarterly Update, as published by the West Virginia Energy Users Group (WVEUG). Our goal remains to provide accurate, fact-based information on energy rates and issues in West Virginia so that the state can be focused on making the changes necessary to advance West Virginia’s economy and enhance its position as a leader in the energy field.
We hope you find this information valuable. If you think a friend or colleague should receive this e-newsletter, or if you wish to be removed from the mailing list, please email us.
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A Note From WVEUG’s Executive Committee: WV Needs a Long Term Plan That Addresses Large Energy Consumer Interests
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Although it is a given that the regulated monopoly utilities and the interests that support traditional coal-fired power plants and other fuel sources will remain well represented in any consideration of West Virginia’s energy future, those shaping that future must engage and meet the energy needs of business and industry for the West Virginia economy to be best served. It simply defies common sense that West Virginia’s electric rates are not more competitive regionally and nationally, and it defies common sense that manufacturing and industry in West Virginia cannot take full advantage of West Virginia’s role as a leading energy producing state.
Legislation and regulatory rules that allow the monopoly utilities to impose multiple surcharges, get accelerated cost recovery, and limit competition for new power resources not only shift the risk of investment from utility shareholders to captive ratepayers, but they make West Virginia that much less competitive. We should not be picking winners and losers in the regulatory arena or choosing to support one fuel source over another. Free market competition and customer choice should be the goal, not the entrenchment of government edicts and unbalanced regulatory control.
WVEUG’s long-term goal is to have an “all options on the table” array of power choices for business and industry, including utility offerings and special contracts, flexible on-site generation options, direct contracting with third-party power producers of any fuel type, and access to the competitively priced power that already exists in the PJM market in which West Virginia operates. WVEUG is open to a dialogue to advance that goal with any and all stakeholders; it’s what’s best for the West Virginia economy.
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It’s the same old tune: WV Average Electric Rates for Business and Industry Remain in the “Middle of the Pack” |
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Per U.S. Energy Information Administration (EIA) data released at the end of January (for November), the average “all in” electric rate in West Virginia for industrial end-users is in the range of 6.10 to 6.25 cents/kWh. West Virginia ranks as having only the 26th lowest electric rate in the U.S. with average industrial electric rates still higher than those available in Ohio, Kentucky, Pennsylvania, Virginia, and even New York, among others. This is true despite the fact that large user rates for FirstEnergy’s West Virginia operating companies – Potomac Edison and Monongahela Power – have actually decreased this month to 5.38 cents/kWh, while the average electric tariff rate for large users on the AEP-West Virginia system (Appalachian Power and Wheeling Power) remains significantly higher and much less competitive at 6.76 cents/kWh.
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AEP Files for Three Separate Rate Surcharge Increases at the Public Service Commission, while FE files for Tax-related Rate Changes |
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Despite its less competitive rates and the economic difficulties facing businesses and all ratepayers as a result of the pandemic, AEP, on behalf of APCo and Wheeling, filed three separate cases in December and January seeking to increase customer rates, with proposed multi-million dollar rate increases in June and September of this year. These three surcharge cases are in addition to cases that AEP will be required to file in late April regarding its fuel cost and vegetation management surcharges, with related rate adjustments likely to occur in September. In other words, in 2021, AEP will be pursuing at least five separate rate surcharge cases.
Late in December, FirstEnergy, on behalf of Mon Power and Potomac Edison, filed for rate changes to complete adjustments associated with the Tax Cuts and Jobs Act; as proposed, no rate changes would occur until the beginning of 2022. FirstEnergy also will be filing for fuel cost surcharge and vegetation management surcharge rate changes later this year.
The West Virginia Energy Users Group already has intervened in the as-filed cases for AEP and FE to protect the interests of large consumers of power, and WVEUG will intervene in the additional surcharge rate cases to be filed in the next several months.
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UGI Proposes to Acquire Mountaineer Gas Company |
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UGI Corporation, a Pennsylvania company operating both natural gas and electric utilities there, announced the acquisition of Mountaintop Energy Holdings LLC, which is the parent company of Mountaineer Gas Company. According to press releases, the reported purchase price for the acquisition is $540 million, which is approximately 1.4 times the total rate base of Mountaineer and includes approximately $140 million of debt acquisition.
UGI and Mountaineer hope to conclude the acquisition by June 2021 and filed a case at the Public Service Commission in late January for approval of the transaction. WVEUG expects to participate in that case as an intervenor.
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