SPILMAN THOMAS & BATTLE pttc

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1 SPILMAN THOMAS & BATTLE pttc A T T O R N E Y S A T L A W March 13,2017 VIA FACSIMILE AND FEDERAL EXPRESS Ms. Ingrid - Ferrell Executive Secretary Public Service Commission of West Virginia 201 Brooks Street Re: Dear Ms. Ferrell: CASE NO E-PC MONONGAHELA POWER COMPANY and THE POTOMAC EDISON COMPANY Joint Petition for consent and approval of a Generation Resource Transaction and related relief Barry A. Naum bnaum@spilmanlaw.com. -, ~~,, :-.=.-_ = ;t! Please find enclosed for filing in the above-referenced case on behalf of the West Virginia Energy Users Group an original and twelve (12) copies of its "Petition to Intervene. " Please contact me if you have any questions concerning this filing. Sincerelv. crry A. Naum (WV State Bar #12791) Derrick Price Williamson Spilman Thomas & Battle, PLLC I100 Bent Creek Boulevard, Suite 101 Mechanicsburg, PA bnaum@,suilmanlaw.com dwilliamson@,spilmanlaw.com Susan J. Riggs (WV State Bar #5246) srigfis@,suilmanlaw.com Carrie M. Harris (WV State Bar #11324) charris@,spilmanlaw.com BAN.sds.wo03s Enclosures C: Certificate of Service Bent Creek Boulevard Suite 101 Mechanicsburg. pennsyivan'a w-sp,(manlawcom fax West Virginia North Carolina Pennsylvania Virginia

2 CERTIFICATE OF SERVICE I, Barry A. Naum, counsel to the West Virginia Energy Users Group, do hereby certify that on this 131h day of March, 2017, a copy of the foregoing "Petition to Intervene" was served upon the parties and/or counsel of record in this proceeding as follows: VIA U.S. MAIL Gary A. Jack, Esquire Senior Corporate Counsel FirstEnergy Service Company 5001 NASA Boulevard Fairmont, WV and Christopher L. Callas, Esquire Nicholas Presley, Esquire Jackson Kelly PLLC P.O. Box 553 Charleston, WV Counselfor Monongahela Power Co. and The Potomac Edison Co. John Auville, Esquire Staff Attorney Public Service Commission of West Virginia 201 Brooks Street Counsel for Commission Staff Jacqueline Roberts, Esquire Tom White, Esquire Heather B. Osborn, Esquire Bobby Lipscomb, Esquire Consumer Advocate Division 700 Union Building 723 Kanawha Boulevard, East Counsel for Consumer Advocate Division Barry A. Naum (WV State Bar #12791)

3 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON CASE NO E-PC MONONGAHELA POWER COMPANY and THE POTOMAC EDISON COMPANY Joint Petition for consent and approval of a Generation Resource Transaction and related relief PETITION TO INTERVENE The West Virginia Energy Users Group ("WVEUG"), pursuant to Rule 12.6 of the Public Service Commission of West Virginia's ("Commission") Rules of Practice and Procedure, moves to intervene in the above-referenced proceeding, asserting that WVEUG has a legal interest in such proceeding sufficient to satisfy the requirements of Rule 12.6 and states as follows: 1. Petitioner is WVEUG. The composition of WVEUG at this point in time for purposes of this proceeding is attached as Appendix "A," Appendix "A" will be updated as necessary. 2. The names and addresses of Petitioner's attorneys are: Susan J. Riggs Spilman Center 300 Kanawha Boulevard, East Phone: (304) Fax: (304) sriens@,spilmanlaw.com Derrick Price Williamson Barry A. Naum 1100 Bent Creek Boulevard, Suite 101 Mechanicsburg, PA Phone: (717) Fax: (717) dwilliamson@spilmanlaw.com bnaum@,spilmanlaw.com - WVEUG requests that the Commission and all parties add WVEUGs counsel to their respective service lists to receive all future filings.

4 6 3. On March 7, 2017, Monongahela Power Company ("Mon Power") and the Potomac Edison Company ("PE") (collectively, "Companies") filed with the Commission a Joint Petition for consent and approval of a Generation Resource Transaction ("GRT") and related relief ("Petition"), seeking Commission authorization for Mon Power to acquire from the Companies' affiliate, Allegheny Energy Supply Company LLC ("AE Supply"), 100 percent of the ownership interest in the 1,300 MW supercritical coal-fired Pleasants Power Station. &, CJ., Petition, p. 3. According to the Petition, the Companies propose to acquire this facility at a price of $195 million, or approximately $150 per kw (interestingly, $583 per kw less than the price paid to Mon Power by AE Supply in 2013, when the former sold its prior 25 percent ownership interest in the plant to the latter). rd. at WVEUG is an ad hoc association of energy-intensive industrial customers receiving electric service from the Companies, principally pursuant to Rate Schedules K and PP. WVEUG members provide thousands of jobs in West Virginia with millions of dollars in combined annual payroll, and they contribute millions of dollars in annual state, local, and property taxes, over and above the substantial contributions that these corporate citizens make to their local communities and charities. 5. The cost of electric utility service is a significant element in the cost of operation for WVEUG members, and WVEUG members have been subject to rate increases on the Companies' system of nearly 100% since 2006, thus the Companies' proposal in this case is of great concern to the ongoing viability and competitiveness of WVEUG members. Regardless of the projected short-term rate decrease and other accompanying benefits that the Companies allege will result from the acquisition of the Pleasants facility, WVEUG has significant concerns regarding the potential and probably long-term cost impact to the Companies' ratepayers. 2

5 Specifically, among other issues, WVEUG is concerned that the Pleasants GRT as proposed by the Petition would: Foist on the Companies' captive ratepayers the entirety of the risk of additional coal-fired generation in the wholesale market, given the initiative of the Company's parent, FirstEnergy Corp. ("FirstEnergy"), to avoid that same risk, and entirely exit the competitive generation market. Petition, p. 6. Impose upon the Companies' ratepayers the entirety of the risk and costs associated with the ongoing operation and maintenance of a nearly 40-year-old generation plant. Cause the Companies' ratepayers to absorb the entirety of the risk and costs related to any future carbon taxes or other carbon regulation, including the costs for future innovative (and expensive) technology such as Carbon Capture and Sequestration. Furthermore, WVEUG is likewise concerned with the Companies' proposal to impose yet another "Temporary Transaction Surcharge" ("TTS") in order to provide the Companies with immediate recovery of costs outside of the Commission's Rule 42 base rate process that is established for, and sufficient for achieving, this purpose. See, e.%, ;d- at 7-8. This is of particular concern given that the large customer classes may be subsidizing the rates of other classes, thus the implementation of the TTS could delay the filing of a rate case in which the issue of inter-class subsidization should he addressed. 7. Accordingly, WVEUG has direct and significant interests in this proceeding, and those interests are not represented by any other party of record. WVEUG petitions the Commission for leave to intervene in order to protect the interests of its constituent members. 3

6 WHEREFORE, the West Virginia Energy Users Group respectfully requests that the Commission grant this Petition to Intervene with full party status. Respectfully submitted, Date: March 13,2017.~ Derrick Price Williamson Barry A. Naum (WV State Bar No ) 1100 Bent Creek Boulevard, Suite 101 Mechanicsburg, PA Phone: (717) Fax: (717) Susan J. Eggs (WV State Bar No. 5246) 300 Kanawha Boulevard, East Phone: (304) Fax: (304) Carrie M. Harris (WV State Bar No ) 310 First Street, Suite 1100 P.O. Box 90 Roanoke, VA Phone: Fax: Counsel to the West Virginia Energy Users Group 4

7 APPENDIX A MEMBERS OF THE WEST VIRGINIA ENERGY USERS GROUP ArcelorMittal USA LLC Argos-US The Chemours Company Graflech Advanced Graphite Materials Linde, LLC Novelis Corporation Quad/Graphics, Inc. Resolute Forest Products U.S. Silica Company Weyerhaeuser Company NR Zoetis, LLC