- Responds to Objections Regarding Proposal for 10-Year Special Power Rate –

- Reiterates Special Power Rate Necessary to Resume Operations -

NEW HAVEN, W. Va. (Dec. 4, 2013) – On Tuesday, Nov. 26, Felman Production, LLC (“Felman”) publicly filed rebuttal testimony with West Virginia’s Public Service Commission (the  “Commission”) responding to objections to its request for a 10-year special power rate (the “Special Rate”).

In its filing, which can be found on the Commission’s website, Felman submitted testimony from Chief Financial Officer Barry Nuss, former Plant Manager John S. Konrady and energy consultant Henry W. Fayne, disputing a number of assertions and objections presented to the Commission by other parties in the proceeding. Felman believes the objections are either based on a misunderstanding of the facts or are not consistent with prior Commission rulings or the legislature’s goal to provide support for energy-intensive businesses.

In its testimony, Felman makes clear the following:

• Its proposed Special Rate is consistent with the legislative intent of Senate Bill 256, compliant with the bill’s requirements, and does not place an unreasonable burden on ratepayers. Rather, approving the Special Rate would serve the interest of all Appalachian Power Company West Virginia ratepayers;

• Felman cannot restart and sustain operations without the Special Rate. With the Special Rate, Felman believes the New Haven Plant will be cost competitive and will be able to continue to operate;

• The proposal presents a risk-free option for ratepayers, and is designed to ensure that Felman pays 100 percent of variable costs over the life of the contract. If Felman were to take advantage of the maximum relief provided by the special rate, ratepayers will not incur any additional costs than they would if Felman were to cease operations;

• Its proposed Special Rate does not guarantee Felman a profit. Rather, the Special Rate provides Felman the ability to continue operating during periods of weak commodity prices, preserving hundreds of good jobs and helping to solidify the region’s economic environment;

 Felman suspended operations on June 28, 2013 due to challenging ferrosilicomanganese market conditions. In late August 2013, the Company submitted an application to the Commission for a 10-year special rate electric contract that would enable it to restart production. The Commission will hold formal hearings regarding the matter on Dec. 9 and 10.

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