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FirstEnergy delays some needed improvements at Beaver County plant

Andrew Russell | Tribune-Review
The Bruce Mansfield Power Station in Beaver County near Shippingport, Wednesday. FirstEnergy Corp. has to close the Little Blue Run coal ash dump by 2016 and will announce its plans for doing it today.

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Tuesday, Aug. 5, 2014, 10:36 a.m.
 

FirstEnergy Corp. wants to raise its electricity rates for Western Pennsylvania customers by more than 8 percent to pay for system upgrades but will delay an improvement project that is necessary to keeping a Beaver County power plant in operation in 2017.

The Akron company this week asked the state Public Utility Commission to approve increases of a combined $415 million for its four Pennsylvania utilities: West Penn, Penn Power, Penelec and Met-Ed. The four utilities serve about 2 million customers.

FirstEnergy said it needs the money to help pay for $1.8 billion worth of transmission and distribution improvements since 2006. But that won't immediately include a needed waste treatment plant at the Bruce Mansfield coal plant in Shippingport.

CEO Anthony Alexander said on Tuesday the company was delaying capital improvements such as the $200 million project to replace its coal ash dump at Little Blue Run because Bruce Mansfield was not chosen in a recent energy auction to provide baseload power to the regional grid in 2017.

There's no plan to close the plant at this time, but it might need to power down if the company doesn't start the two-year treatment project on time.

“It can't operate after December 2016 without the improvement,” Alexander said while discussing the company's latest earnings during a conference call.

Beaver County Commissioners Chairman Tony Amadio said FirstEnergy did not inform them about what's happening at the Shippingport plant, which employs about 360 people.

“We need the jobs,” he said. “If there is anything that we as commissioners can do to help save those jobs, then absolutely we're interested in doing whatever we can.”

Company spokeswoman Stephanie Walton said no job reductions are planned and the company will continue to review operations for the next few months. It will make other improvements at the plant to meet federal mercury and air emissions rules that take effect in 2016.

FirstEnergy reported a $64 million profit, or 15 cents per share, on flat revenue of nearly $3.5 billion during the three months that ended June 30. That compares to a $164 million loss, or 39 cents per share, in the same period last year.

If approved in their entirety, the company's first base-rate increases in more than 20 years would boost average residential bills by 14.7 percent among West Penn's 720,000 customers and 11.8 percent for Penn Power's 161,000 customers. Increases for commercial and industrial customers would be lower. The increase covers the rate charged for delivery of electricity.

Competitive supply rates, which utilities charge for the amount of electricity a customer uses, are unregulated and have likely changed in recent years.

The increase would allow FirstEnergy “to address ongoing challenges of upgrading, modernizing and maintaining adequate and reliable electric service,” Alexander said.

Rate-increase requests generally trigger a nine-month process that can end with the Public Utility Commission approving some, all or none of it.

“The commission will investigate what if any part of the increase is justified,” agency spokeswoman Robin Tilley said. She said the commission would schedule public hearings on the request, likely in the fall.

FirstEnergy warned in January that it would ask for increases, its first for the delivery rates in 20 years for West Penn and 26 years for Penn Power.

Some customers said an increase would hurt.

“Basically, we have to absorb that cost because (customers) are being affected by this in their homes, too,” said Kevin Miscik, owner of Lapel's men's clothing store in downtown Greensburg.

The Westmoreland Cultural Trust, which operates the Palace Theater and the Greensburg Garden and Civic Center in Greensburg, said it won't raise ticket prices, but it's looking for ways to cut its electric bill, which runs from $90,000 to $95,000 a year.

“We pay a great deal of attention to this,” said Michael Langer, president of the nonprofit

The requested increases would equate to higher bills for customers of Penelec and Met-Ed, which serve a combined 1.16 million customers in northern, central and eastern parts of the state.

FirstEnergy also requested increases in Ohio, West Virginia and New Jersey.

Staff writers Joe Napsha and Tom Fontaine contributed to this report. David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or dconti@tribweb.com.

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