PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON

Transcription

1 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON At as session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the City of Charleston on the gth day of November CASE NO E-P AMERICAN BITUMINOUS POWER PARTNERS, L.P. and MONONGAHELA POWER COMPANY Joint Petition for Approval of Amendment to Electric Energy Purchase Agreement and Associated Ratemaking Treatment. COMMISSION ORDER The Commission accepts an amendment to an Electric Energy Purchase Agreement (EEPA) for filing in this docket. BACKGROUND' By Cornmission Order on Reconsideration and Clarification issued in this proceeding on September 5, 2018, the Commission ordered, among other things, that Monongahela Power Company (Mon Power) and American Bituminous Power Partners, L.P. (AmBit) (collectively Joint Petitioners) file, within twenty days (i) an executed revised EEPA consistent with the Order or (ii) a statement that Mon Power and AmBit will not enter into a revised EEPA consistent with the Order. September 5, 2018 Commission Order at 18, seventh Ordering Paragraph. On September 21, 2018, the Joint Petitioners filed a written request for an extension until October 2, 20 18, to permit the Joint Petitioners to finalize negotiations on a revised EEPA. By Order issued September 25, 2018, the Commission granted the request for an extension of time. On October 2, 2018, Mon Power and AmBit filed an executed Amendment Agreement dated October 2, (Amendment Agreement), amending the EEPA between Mon Power and AmBit dated September 15, 1988, as previously amended. ' The procedural background in this case is set forth in the Commission Orders issued May 3, 2018 and September 5,2018.

2 Mon Power and AmBit served the Amendment Agreement on all parties and no party has filed an objection. On October 5, 2018, Sierra Club, a party to this case, filed an Appeal of the September 5, 20 18, Commission Order on Reconsideration and Clarification to the West Virginia Supreme Court of Appeals. DISCUSSION The Amendment Agreement includes paragraph 4 with payment provisions that differ from the schedule of energy payments contemplated by the September 5, 2018 Commission Order on Reconsideration. The amended payment provisions, however, are more protective of ratepayers of Mon Power and The Potomac Edison Company (PE). The third Ordering Paragraph of the September 5, 2018 Commission Order, required: IT IS FURTHER ORDERED that the May 3, 2018, Commission Order is modified to approve the pass-through to Monongahela Power Company and The Potomac Edison Company retail customers of a $34.25 per MWh fixed capacity rate and the energy rates set forth on Appendix A, page 4 of 4, paid to American Bituminous Power Partners, L.P., in the future ENEC rate adjustment filed by Mon Power and PE through May 28, 2036, contingent on Mon Power and AmBit agreeing to enter into a revised EEPA consistent with this Order. Paragraph 4 of the Amendment Agreement provides, instead: 4. All-In Levelized Cost Rate Ceiling. Buyer and Seller agree to insert a new paragraph (g) to Section 1.2 and definitions for Levelized Avoided Cost Rate Ceiling and Current All-In Levelized Cost Rate in Section 9.1 of the EEPA: 1.2 (8) - "At the conclusion of each Billing Period before the itemized statement is delivered to the Seller, Buyer shall calculate the Current All-In Levelized Cost Rate based on all net payments made to Seller by Buyer to date including the upcoming payment for the Billing Period. Should the calculated payment for the Billing Period cause the Current All-In Levelized Cost Rate to exceed the Levelized Avoided Cost Rate Ceiling, the payment for the applicable Billing Period will be reduced so that the Current All-In Levelized Cost Rate does not exceed the Levelized Avoided Cost Rate Ceiling. Any such payment reduction in any Billing Period shall be credited to Seller in fbture Billing Periods as long as the Levelized Avoided Cost Rate Ceiling is not exceeded." 2

3 "Levelized Avoided Cost Rate Ceiling" means "$52.74/MWh". ''Current All-In Levelized Cost Rate" means the calculated levelized payment value for all payments made since the Commencement Date plus the calculated payment for the Billing Period as the calculation is hlly detailed in Attachment A to the Amendment Agreement. The discount rate to be used for all years of the calculation will be fixed at 7.5 0%. The Commission has no objection to the Paragraph 4 payment provisions because the purchased power rates that Mon Power will pay to AmBit under the Amendment Agreement will result in total payments over the life of the Amendment Agreement that will not exceed, and could fall below, the all-in levelized avoided cost rate of $ The total payments contemplated by the September 5, 2018, Commission Order through May 28, 2036, by comparison, would have exactly equaled the levelized avoided cost rate ceiling because both capacity and energy rates would have been locked in. Therefore, the all-in cost over the life of the contract would have never been less than or more than the levelized avoided cost rate ceiling of $52.74 per MWh. The Amendment Agreement, therefore, is more protective of Mon Power and PE ratepayers. Paragraph 4 will effectuate the levelized avoided cost rate ceiling set forth in the Commission's May 3, 2018 and September 5, 2018 Orders, and therefore the payment provisions of the Amendment Agreement are consistent with the Commission Order on Reconsideration and Clarification. The Amendment Agreement is otherwise consistent with the Commission Order on Reconsideration. Accordingly, Mon Power and AmBit, by executing the Amendment Agreement, have substantively satisfied the contingency of Ordering paragraph three of the September 5, Commission Order on Reconsideration and Clarification. The Amendment Agreement will be accepted for filing as a closed entry in this docket. The pass-through to Mon Power and The Potomac Edison Company (PE) of the $34.25 per MWh fixed capacity rate and the payments calculated pursuant to Amendment Agreement paragraph 4 that, when added to the fixed capacity rate, will not result in a payment that exceeds the Levelized Avoided Cost Rate Ceiling as defined in the Amendment Agreement, will be allowed in future ENEC adjustments filed by Mon Power and PE through May 28,2036. FINDINGS OF FACT 1. Amendment Agreement paragraph 4 sets forth payment provisions that are different from the payments set forth on the energy payment schedule attached to the September 5, Commission Order on Reconsideration and Clarification, but that are more protective of ratepayers. 3

4 2. The purchased power rates that Mon Power will pay to AmBit under the 4 Amendment Agreement will result in total payments over the life of the Amendment Agreement that will not exceed, and could fall below, the all-in levelized avoided cost rate of $ The total payments contemplated by the September 5, 201 8, Commission Order through May 28, 2036, would have never been less than or more than the levelized avoided cost rate ceiling of $52.74 per MWh. 4. Except for the difference in the payment provision set forth in Amendment Agreement paragraph 4, the Amendment Agreement is consistent with the September 5, Commission Order on Reconsideration and Clarification. CONCLUSIONS OF LAW 1. Paragraph 4 will effectuate the levelized avoided cost rate ceiling set forth in the Commission s May 3, 2018 and September 5,2018 Orders. 2. The payment provisions of the Amendment Agreement are consistent with the Commission Order on Reconsideration. 3. Mon Power and AmBit, by executing the Amendment Agreement, have substantively satisfied the contingency of Ordering paragraph three of the September 5, Commission Order on Reconsideration and Clarification. ORDER IT IS THEREFORE ORDERED that the Amendment Agreement dated October 2, 201 8, is accepted for filing as a closed entry in this docket. IT IS FURTHER ORDERED that the pass-through to customers of Monongahela Power Company and The Potomac Edison Company (PE) of amounts Mon Power pays to American Bituminous Power Partners, L.P. pursuant to the EEPA in effect prior to October 2, 20 18, as amended in the Amendment Agreement dated October 2, 20 18, will be allowed in future ENEC adjustments filed by Mon Power and PE through May 28, IT IS FURTHER ORDERED that this case remains closed on the Commission docket. 4

5 * IT IS FURTHER ORDERED that the Executive Secretary of the Commission serve a copy of this Order by electronic service on all parties of record who have filed an e-service agreement, by United States First Class Mail on all parties of record who have not filed an e-service agreement, and on Staff by hand delivery. Chairman Michael A. Albert is recused. A True Copy, Teste, Ingrid Ferrell Executive Secretary JML/rm cf 5