CHARLESTON, W.Va. – The state Public Service Commission has rejected a request by Appalachian Power Company to purchase two wind farms.
The PSC decision, signed Wednesday, follows a similar decision made by Virginia regulators in early April.
Appalachian Power and Wheeling Power, companies owned by American Electric Power, asked the PSC and Virginia State Corporation Commission last July to approve its plan to buy the Beech Ridge II Wind Facility in Greenbrier County and the Hardin Wind Facility in Ohio for more than $86 million. The cost would have been spread out to customers over a 25-year period. The company could have taken advantage of tax credits for the first 10-years of the pay back.
Appalachian Power Communications Director Jeri Matheney called the PSC decision disappointing when speaking to MetroNews Thursday.
“Wind energy is a very low-cost source of energy. We were hopeful we would be able to provide that,” Matheney said.
The company plans to continue to have wind power in its power generating portfolio but it will continue to have to purchase the energy instead of owning wind turbines itself. Matheney said the company believed the two proposed purchases would have been a very good deal for its customers.
“It’s very low-cost energy but the (PSC) commission made the decision it would be more cost-effective to purchase the energy,” Matheney said.
Specifically, the PSC concluded, “Because of the availability of an ample wholesale purchase option from the PJM energy market, the Companies do not have a need
to own or bi-laterally contract for additional energy to meet their internal load requirements.”
The PSC said it was also concerned about the impact the purchases would have on the rates customers pay for electricity.
“We are not inclined to lock-in twenty-five years of base rate costs for power supply that is just as likely to cost more than the market alternative,” the order said.
The PSC staff concluded customers would actually pay back $50 million more than what the cost would be for Appalachian Power to purchase the wind energy as it does now.
Matheney said Appalachian Power currently has no further plans to own wind turbines.
Wind energy makes up less than 10 percent of the company’s portfolio.