To: BJGregg, WV-PSC-Consumer Advocate.

We've been told that Allegheny Energy under estimated the cost for

stack gas scrubbers for the Ft. Martin power plant, and so the

"securitization" fee funds will not be adequate...................

Have you considered this circumstance, and what are the

options in a nutshell................?

Thank you.

Duane Nichols, Convenor, Mon-Valley Clean Air Coalition

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Yes, you heard right. The estimate for the construction costs of the plant that was included in the PSC's securitization order was $338 million.

Allegheny has now come back and told us that based on site specific engineering, the cost will be closer to $500 million. They have not made any formal filing with the PSC as of yet. My initial reaction is to stick with securitization at $338 million and have Allegheny finance the difference, using traditional rate making for any recovery of their investment.

This may ultimately cost more in the long run than securitizing the entire amount, but I think it places an appropriate share of the risk on Allegheny and will provide a better incentive for them to minimize costs. The irony here is that if they had come initially and estimated the cost to be $500 million, we probably would have approved it, since the cost is still less than the scrubbers at Harrison that were installed in 1994.

Billy Jack Gregg, PSC Consumer Advocate