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October 29, 2013

WV Directs FirstEnergy to Double Energy Efficiency by 2018

Lincoln-County-WV-pre-MTRLincoln County, West Virginia, before mountaintop-removal mining.

On October 7, the West Virginia Public Service Commission issued an order requiring FirstEnergy to, among other things, double its energy efficiency target to one percent annually by 2018. This is a great move for increasing savings on rate-payer bills, fighting climate disruption, and creating new jobs.

It all started when, late last year, FirstEnergy-regulated subsidiary Monongahela Power requested permission from the Commission to acquire nearly 1,500 megawatts of coal-fired capacity from fellow FirstEnergy subsidiary Allegheny Energy Supply, at a price to ratepayers of over $1.1 billion.

The Sierra Club intervened in that proceeding, and, along with others, argued extensively that:

  • The proposed price was too steep;
  • Acquiring more coal-fired generation was environmentally short-sighted and risky to ratepayers;
  • That the utility would be saddled with excess capacity it would be unlikely to recoup through market sales;
  • And that investments in energy efficiency along with market purchases of electricity would be a dramatically cheaper way to serve customers, create jobs, and protect the environment.

The Club then participated in a coalition of stakeholders to help drive a settlement with FirstEnergy, resulting in dramatic increases in FirstEnergy's energy-efficiency requirements, investments in home and school weatherization projects to save even more energy, assistance to low-income ratepayers, and a savings of hundreds of millions of dollars to Monongahela Power's West Virginia customers.       

The Commission approved the settlement, but also went further. Citing concerns about overreliance on coal in a world seeking to address carbon pollution, the Commission determined that FirstEnergy must bear more of the risk that carbon pricing and future environmental and public health standards would render the investment in more coal-fired generation a bad bet on behalf of its customers. As such, it may only recover from customers funds for part of the asset transfer if it can't sell enough of its new, surplus electricity to non-West Virginia customers.

In the end, the dramatic increase in FirstEnergy's energy-efficiency targets in West Virginia will end up helping keep the air clean, fight climate disruption, protect customers, and create new clean energy jobs in West Virginia.

By Zack Fabish, Attorney, Sierra Club Environmental Law Program


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