homepage logo

New Martinsville Dips Into Hydro Fund To Pay REC Legal Fees

By Staff | Jan 30, 2013

New Martinsville City Council agreed unanimously to transfer $200,000 from the Hannibal Hydro Trust Reserve Account to the Self Insurance Fund ($150,000) and General Fund ($50,000) during a special meeting held Thursday.

The move was recommended by the city’s finance committee. Recorder Bonnie Shannon said the hydro fund contained $318,000, prior to the transfer. This is the first time the city has dipped into that account. “We’ve never touched it,” noted Shannon.

She said the money is primarily needed to pay the city’s legal expenses in their battle to obtain Alternative and Renewable Energy Resource Credits.

Electric utilities will soon be required to obtain credits to prove the percentage of their power that comes from alternative and renewable resources as dictated by the 2009 Alternative and Renewable Energy Portfolio (AREP) Act. By 2015 these alternative sources must make up 10 percent of a utility’s portfolio; 15 percent by 2020; and 25 percent by 2025.

The credits will be sold by alternative power generators. If the ruling would give the credits from the Hannibal Hydroelectric plant to New Martinsville to sell, it could be very lucrative for the city.

However, New Martinsville contracts the operations of its hydroelectric plant to Mon Power. That makes ownership of the credits a bit confusing. In November 2011 the West Virginia Public Service Commission decided to give Public Utility Regulatory Policies Act-based credits to Mon Power.

New Martinsville is appealing that decision. But the legal fight comes at a cost. Originally projected to cost about $50,000, Shannon said so far she has paid legal bills totaling $150,000 and has another $100,000 that need to be paid.

New Martinsville Electric Department Supervisor David White said a hearing on the matter is scheduled in U.S. Federal District Court next month. A motion for summary judgement is expected at that time.

Council specified that the $200,000 taken from the Hannibal Hydro Trust Reserve Account should be returned to the fund as soon as feasible. However, no deadline was given.

In the only other matter during the special meeting, council agreed to pay the $5,207.12 in medical expenses an employee incurred after an accident. Shannon explained that the city’s health insurance only pays on treatment from an accident for one year. “The damage done could not be corrected within a year,” she noted.

“I think that’s the right thing to do,” said Councilwoman Kay Goddard.

After a five-minute executive session to discuss the matter, council reconvened and approved it unanimously.

Immediately after the council meeting the finance committee met to discuss ideas on funding sources or costs savings for the city, clothing allowances, and health insurance costs for new hires. Eleven city employees attended the meetings and offered some input. The finance committee will meet again Thursday at 6 p.m. to discuss business and occupation taxes and funding sources. They expect interested business people to attend the meeting and offer their ideas and suggestions.