September 22,2017. Dear Ms, Ferrcll: Enclosed for filing is the original aid 12 copies of Monongahela Powcr's Bricf in the above reference mattcr.

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1 ~~ PO#mPdb( FrmFirstEnergv Corp Fan:First Energy Corp KOFAX+ at: :21 Doc:lbJ Page: NASA Boulevard Fairmonl, WV Gary A. Jack smmr corporate counsel September 22,2017 Ms. Ingrid Ferrell Executive Secretary Public Service Commission of Wcst Virginia 201 Brooks Street POBox812 Charleston, WV : Ainerican Bituminous Power Partners, L.P. v. ~~onon~ahela Power Comp~n~ Case No E-P Dear Ms, Ferrcll: Enclosed for filing is the original aid 12 copies of Monongahela Powcr's Bricf in the above reference mattcr. Sincerely, Gary A. Jick GAJ :din1 Enclosures cc: Certificatc of Scnke L

2 ~. PiV.*lOdiri Frm:FirstEnergy Corp Fan:First Energy Cwp KOFAX't at: :21 Doc:lb3 Page:003 PUBLLC SERVICE COMMlSSfON OF WESTVIRGMIA CHARLESTON CASE NO E-P AMERICAN BITUMINOUS POWER PARTNERS, L.P. and MONONGAHELA POWER COMPANY Joirit Petition to re-open and reques! for approval of amendment to Electric Encrgy Purchase Agreement and Associated Ratemaking Treatment 7; 3.. ~.,, >~ '~_ BRIEF OF MONONGA ELA POWER C O~PA~Y Moiiongaliela Power Company ("Mon Power"), the purchasing party to the Electiic Energy Purchase Agrccmenl ("EEPA") approved by the Commission in an Order dated November 10, 1988 in CaseNo E-C ("1Y8S Order"), hereby filcs its Initial Brief. 1. Mon Power has agreed to an amendment agreement ("Amendment Agreement") to the EEPA subject to the C,ommission's review and approvai of full and timety cost recovery of the amendments. Mon Power is not restating the facts and rcquests kom the Petition, and believes that the Bricf of American Bituminous Power Partncrs, LP ('iatnbit"): tlie owner of the Grant Town project, provides a full description and argument of the case. 2. Mon Power believes that Ambit's financial condition is dire and that without a change to thc capacity rate reduction occurring October 1, 2017, that the Grant Town project will close within a year therereaftzr. 3. Ambit requested that it be paid a citpacity rate of $40.00/MWH, which is the same capacity rate as the WVU PURPA-cogeneration project in Morgantown, West Virginia.

3 VO %MB Frm:FirstEnRrgy Corp Fax:Firat Energy Corp KOFAX i at: :21 Doc:l63 Page:004 Moil Powcr has agreed to the rate change subject to Commission approval. Two other changes to the EEPA were agreed to, but the capacity rate is the major change. Mon Power rec.oguizes that the Ambit contract is above market today and may bc further above markct after any approval oftlic runendnientirate changc. If this amended contracl is approved by the Cornmission, Mon Power s overall ratcs will increase by an average of 0.3% across all customer ratc schedules ovei- current rates aid over the rates that will be in effect beginning October 1, 2017 due to the reduction in capacity price that will occur in the current contract. 4. The Grant Town projecl does providc many economic bencfits to the state and region, including the clean-up of gob piles, gencration of beneficial ash, the support of employment and taxes. Under the West Virginia Code. the Commission is obligated to take into account the benefits the project provides to the state. WV Code Many parties have cnticizcd Mon Poujw for agreeing to the proposed EEPA changes aid bringing this mattcr to the Commission. However, undcr the clear legal precedent, if Mon Power had not joincd in this case, the Grant Town project, who has been relkbly providing power to Mon Power and its customers for 25 years, would likely close its operations very soon without any revicw hy the Commission and other impacted parties. Ambit cannot request unilaterally for Commission revicur and action on the EEPA. Any request must be joined by Mon Power. Therefore, Moil Powerjoincd in this petition so that this matter could bc fully reviewed by the Cominissioii and vetted before dire consequences, such as closure, do in fact occur. 5. Mon Power realizes that its customers rates have inc.reased over the past decade but not the 100% as stated by the WV Energy Users Group at the hearing. Tr p. 96,280. Based 2

4 PW*,~*a/ Frm:Fir+tEnergy Fax:Fir+t Enwgy Corp KOFAX'f at: :21 Ooc:163 Page:oo5 on filed rate tariffs with this Commission, for which the Commission may take judicial notice, Mon Power's industrial rates have increased about 60% during the past decade and residential 1-ates about 50% during the past decade. Most of thosc increases can be attributed to ENEC costs that flow through from PJM assessments for transmission and purchased power, and there are Company proposed rate decreascs pending before the Commission today. Thc Pleasants transaction, if consuniniated, will reduce Mon Power industrial rates (Case No E- PC) and a reduction to the Vegetation Management Surcharge (Case No E-P) is before the Commission for rates to be effective January 1, Further, Mon Power anticipates filing a decrease to its Energy Efficiency Surcharge on or before Octobcr 1,2017 to he effective January 1, While thesc decreases do not nkwt the increases experienced in rates over the past decade, they help and reflect a recent downward trend in rates. 6. Mon Power takes very seriously its commitment to try to find ways to reduce. rates, including PUKPA costs. Pursuant to the ENEC case settlctnent last year, Case No E-ENEC, Moil Power is reviewing whethcr there are any options to lower PURPA costs and will report its analysis and findings at or bcfore the next ENEC case filing on or before September 1, However: Mot1 Power does not expect the Grant Town project to be operating at that point (September 201 S) unless rate modifications are made to the EEPA. 7. Mon Power believes that Staff wilness Eads presented an accurate dcpiction of the situation at healing. He noted that Ambit's c.osls appear reasonable. He did not have any objection to two of the three ainendnients. His objection was with the capacity price of 4 centskwli. He performed factual analysis using various forecasts. Eads Direct Testimony at p. 12. The forecasts used unfortunately produced a negative net present value based on current 3

5 *m*,*an< Fron:FirstEnwgy Cwp Fax:First Energy Cwp KOFAK? at: :21 ljoclih3 Page:Mhb assumptions of fkture market conditions, meaning that bascd on the forecasts he uscd it is cheaper for Mon Power to buy from the market, The Company does not dispute his valuation, at least in the near tenn. He did note that the markets are volatile and that there is uncertainty in the PJM mal-kets. Mr. Rads' negative NPV analysis has grown from two years ago when these parties filed for EEPA amendments, but the forecasts have and will change in both the near and long tenn. 8. In short, this casc boils down to a weighing ofthe increased costs to customers, both today and currently predicted for the future, versus the benefits the Grant Town projcct unquestionably produces --- now and for the future. Mon Power has joincd in the joint pctition and permitted Amhit to make its case to the Commission on the costs and the future ofthe plant. The Ambit evidence addre.ssed most, if not all, of the shortfalls identified in the Commission's order in the fall of 2016, including avoiding tying the price to the market. Mon Power also agrees with the Ambit testimony that the regulations implementing PURPA of FERC and this Cominission support the approval of the mutually agreed-to EEPA Amendment, or at the minimum, rate recovery by h4on Power of the EEPA Amendment, and for all these reasons believes that the request should receive the favorable attention of the Commission. Respcctfiillp submitted this 22th day of Scptember, 2017.

6 lo- MONONGAHELA POWER COMPANY By Counsel JACKS'OVN KELLY PLLC 1600 L.aidley Tower Post Office Box 553 Charleston, West Virginia (304) Gary A. Jack, WV Bar ID 1855 Senior Corporate Counsel FirstEnergy 5001 NASA Blvd. Fairmont. WV Phone: Counsel for ~ onon~dhe~~ Power Company 5

7 P'YIILSbl Frm:FirstEnwgy Cwp Fax:FirSt Enwgy Corp KOOMX') at: :21 Doc:163 Paqe:O08 RE: American B ~ t Power ~ Partners, ~ ~ L.P. ~ v. s ~~omomgahela Power ~ orn~an~ Case No E-P CER~I~I~ATE OF SERVICE I hereby certiq thdt on this 22"d day of September 201 7, a copy of the foregoing Brief was sent by and 1.1,s. Mail, First Class, to: John R. AuvilIe Staff Attorney Legal Division Public Service Commission of WV PO Box 812 Charleston, WV Deirick Price Williamson BanyA Naum Counsel. Wcst Virginia Energy Users Group 1100 Bcnt Creek Blvd., Suite 101 Mechanicsburg, PA Heathcr B. Osbom, Esq. Consumcr Advocate Division 700 Gnion Building 723 Kanawtia Roulevard, East Charleston, WV Susan J. Riggs, Esq. Counsel, West Virginia Energy IJsers Group Spitmiin Thomas & Battle PO Box 273 Charleston, WV Evan Johns Appalachian Mountain Advocates 415 Seventh Street Northeast Charlottesvillr, VA Mike Becher Appalachian Mountain Advocates 5463 Maper Estates Clendenin, WV 25045

8 .. vm srum.s*k TO: Frm:FirstEnwgy Corp Fau:First Energy Corp KOFAW at: :21 Doc: 163 Page:W1 ~'.~ Number of pages including cover sheet: To: Ingrid FerreU Executive Sccretary From: Gary Jack Phone Fax phone Phone: Cas phone: CONFIDENTIALITY NOTE This information is LEGALLY PRIVILEGED AND CONFI~ENTIAL INFORMATION intended only for the use oi the individual named above. If you are not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this telecopy is strictly prohibited, lmm~iat~y notify us by telephone if you have received this telecopy in error. Please return the original message to us at the address above via the United States Postal Service. Thank you. c] For your review 0 Reply ASAP 0 Piease comment ~tu~inou~ Power onon~al~elm Po~~er Co~pmn~ Case No E- rief If you do not receive pages properly, contact telefacsimile operator at: (724) Oeanna Leone