WVPA Sharing

First Energy asks for $75.8 million increase over two years

By Andrew Brown

The Charleston Gazette-Mail

CHARLESTON, W.Va. — First Energy is asking for an additional $75.8 million from customers over the next two years to cover past and future costs associated with the company’s tree-trimming programs.

On Monday, the parent company of MonPower and Potomac Edison filed a request to increase its vegetation management surcharge, which covers the company’s cost of maintaining trees and brush along their power lines.

The multimillion-dollar request comes exactly two weeks after First Energy asked for a separate $165 million rate increase for fuel costs, power purchases and other cost overruns at the Harrison Power Plant. It also precedes a PSC hearing on Sept. 11 that could determine if MonPower and Potomac Edison customers are asked to pay an additional $85 million between 2017 and 2036 in order to save the financially-troubled Grant Town Power Plant in Marion County.

According to the filing Monday, First Energy officials argue that they need to tack on the additional $75.8 million in surcharges — a 2.8 percent increase — to cover $51.9 million in past vegetation management expenses and $23.9 million in expected vegetation management costs in 2016 and 2017.

According to testimony by First Energy officials, that rate increase will cost a residential electric customer using 1,000 kilowatts a month an additional $3.64 per month, increasing their bills from $101 to $104.

In 2013, the PSC ordered all electric utilities in West Virginia to come up with a comprehensive vegetation management program, after trees brought down by storms including 2012’s derecho and Hurricane Sandy left some customers without power for weeks.

Todd Meyers, spokesman for MonPower and Potomac Edison, said while the programs have cost customers, it has also improved First Energy’s electric reliability throughout West Virginia.

Meyers said First Energy officials have conducted studies that compare utility lines that have been trimmed and those that have not during recent winter storms. He said the lines that have been trimmed under the program showed less outages and shorter outage times than lines that have not yet been trimmed.

According to Meyers, the programs have included an uptick in the number of tree trimming contractors from 640 before 2014 to around 1,000 now. He said those contractors have trimmed 2 million trees removed 400,000 more that might be near a line and improved around 7,000 miles of line.

“The idea is to make their service reliability better,” Meyer said. “There are indications that it is already improving service for customers.”

First Energy’s ability to file a separate vegetation management case, forecast future program expenses and place surcharges on electric customers is the result of recent PSC decisions that argued the annual surcharges would help the state’s electric companies — First Energy and American Electric Power — better maintain their transmission lines.

But that effort was criticized by the Consumer Advocates Division, which said the move set a bad precedent and weakened the traditional rate making policies of the PSC, where nearly all facets of a utility’s business were considered in a single rate case.

At that time, Jackie Roberts, the CAD director, said allowing electric companies to assess additional surcharges to customers’ bills for tree trimming programs was just the most recent step in a trend toward companies filing a number of smaller rate cases.

According First Energy’s testimony, the company is expected to receive an 8.19 percent return on the cash expenditures under the program before taxes.

In these cases, Roberts said the commission needs to weigh what is needed for the utility to provide safe and reliable service against the customers interest in having reasonable rates.

“On its face, it certainly appears this filing would fail that test,” she said.

Reach Andrew Brown at [email protected], 304-348-4814 or follow @Andy_Ed_Brown on Twitter.

– See more at: http://www.wvgazettemail.com/article/20150831/GZ01/150839858/1419#sthash.TVdXfIkJ.dpuf

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