News and Analysis
OMA Engages the Public on AEP’s Rate Increase Request
The OMA issued a press release last week quoting manufacturers who have submitted letters to the PUCO challenging AEP’s proposed 52% increase. As a result, newspapers around the state (Findlay Courier, Portsmouth Daily Times, Business First) ran articles on AEP’s rate increase request as a result.
In OMA’s press release, Kevin Schmidt, Director of Public Policy Services, said that AEP’s current return-on-equity, the measure for the statutory excessive earnings test applied to regulated utilities, is already well above its regulated peers and AEP’s justifications for increased prices, like fuel costs, are falling apart as commodity prices plummet.
PUCO Acts to Protect Customers in AEP and FirstEnergy Cases
Acting under the authority of the recently passed SB 221, the Public Utilities Commission of Ohio (PUCO) produced two very important, consumer-protecting orders on Friday afternoon:
The PUCO issued a finding and order in FirstEnergy’s case that appears to be very customer friendly. The full F&O can be found here. Lang Bell, OMA counsel, will be preparing a full summary and analysis for review early next week. In the interim, here are the high points:
Approved base generation rates are $.0675 for 2009, $.0695 for 2010, and $.071 for 2011.
All charges will be bypassable for a shopping customer except a distribution infrastructure rider of 2 mills.
The RTC charge for CEI customers in 2009 and 2010 is waived.
By law, FirstEnergy has the ability to reject the ESP and go to market. The OMA will update members as soon as we know what FirstEnergy’s decision is. Also, the F&O requires FirstEnergy to file tariffs in accordance with the F&O by December 29th.
In another matter, AEP’s rates will stay flat through February 2009 due to PUCO action today. The OMA led the advocacy effort at the PUCO for no increases in the interim. With this action, the PUCO accepted the consumer-protecting OMA position.
OMA Applauds PUCO Rejection of FirstEnergy’s “Market” Offer
In a strongly worded opinion last week, the PUCO resoundingly rejected FirstEnergy’s (FE) Market Rate Offer. FirstEnergy filed its Market Rate Offer (MRO) earlier this year to transition its state-regulated rates to the federally regulated “market.”
The PUCO found fault with nearly every major provision in FE’s plan including but not limited to: the proposal does not have adequate oversight by a third party, pricing information would not be reliably and consistently available, and it would not result in an open, fair and transparent bidding process.
This action by the PUCO is a victory for manufacturers who have advocated for strong state oversight of monopoly electric distribution utilities.
PUCO Turns Down FirstEnergy
PUCO Chairman Alan Schriber said this week that the Commission will be “following the law” and will not consider FirstEnergy’s short-term proposal regarding electricity regulation. The Commission meeting proceedings can be viewed by webcast.
The OMA argued against FirstEnergy’s proposal, stating that SB 221 does not allow for interim plans and requested that the Commission not allow regulated entities to dictate terms to its regulator. This decision may have effects in the AEP rate case, as AEP and PUCO staff have both laid interim plans on the table. Both FirstEnergy’s and AEP’s interim plans call for price increases.
How does Congress’s Wall Street bailout help create new incentives for producing clean energy?
The Emergency Economic Stabilization Act of 2008, commonly known as the “Bailout Bill,” became law on October 3, 2008. In addition to granting the Secretary of the Treasury the power to deal with the financial crisis, the Act also included several provisions wholly unrelated to saving the financial sector. One such provision, the Energy Improvement and Extension Act of 2008 (EIEA), both expands existing financial incentives and creates new ones for producing cleaner energy. From OMA Connections Partner, Bricker & Eckler LLP
OMA Objects to AEP’s Interim Plan
This week, the OMA filed its brief with the PUCO regarding an interim plan for AEP’s rates. The OMA noted that SB 221 directs the PUCO to continue existing rate plans should a long-term Electric Security Plan (ESP) not be in place on January 1, 2009.
AEP’s current rate plan does not include rate increases for 2009; therefore, existing rates should remain in place until a long-term plan is approved. Hearings continue on AEP’s long-term ESP in which AEP is asking for a 51% increase over 3 years.
The OMA is challenging the justifications for this increase, such as increased fuel costs (coal costs have fallen off a cliff along with other commodities in the second half of this year). Please contact Kevin Schmidt at the OMA if you would like to become involved AEP’s rate case.
$150 Million Available for Advanced Energy Projects
Lt. Gov. Lee Fisher and Executive Director of the Ohio Air Quality Development Authority, Mark Shanahan, unveiled the application process and web site for the $150 million Advanced Energy Job Stimulus Fund this week.
The fund is seeking projects that are on a fast track to commercialization, can attract additional investment and that will create jobs. Eligible projects are varied and include: solar, wind, hydro, biomass, geothermal, energy efficiency, distributed generation, waste conversion, clean coal and advanced nuclear, among others.
Visit the web site for further details and application process: www.ohioairquality.org/advanced_energy_program/ Also, interested parties can attend – live or via webcast – a work shop on November 7 at the Ohio Department of Natural Resources Assembly Center, Building E, 2045 Morse Road, Columbus, from 3:00 to 5:00 p.m. 10/31/2008
PUCO Rules in Favor of Customers
PUCO Rules in Favor of Customers seemingly new PUCO has recognized current economic conditions and stepped up for utility customers. Citing deteriorating economic conditions and the relatively low risk incurred by a regulated utility, the PUCO unilaterally reduced the approved rate of return for the utility by 20 basis points. While this case is not related to currently pending electricity rate cases, it reveals the thought processes of a new PUCO. The OMA views this development as a positive one.
Economic Development Directors Lining up behind AEP’s 52% Increase
AEP has been quietly procuring support for its unwarranted three-year 52% minimum increase on electricity prices. Some business groups have filed letters supporting AEP at the Public Utilities Commission of Ohio. By filing letters these groups have joined the official record in support of AEP.
To date, economic development directors from Paulding and Fairfield counties, as well as the Lima/Allen County Chamber of Commerce and the Coshocton Port Authority, have filed letters supporting AEP. This is not at all helpful to business (or residential) consumers.
Please take the time tell your side of the story by sending a letter to the PUCO. If you would like to become more directly engaged join the OMA’s AEP opt-in group. Contact Kevin Schmidt at the OMA to find out how.
OMA/EMS Webinar Recording: Cut the Cost of Lighting Your Plant
OMA Recorded Webinar – Cut the Cost of Lighting Your Plant Older-style light fixtures lose 70% of their light output in two years. Your plant gets dimmer, but your electric bills stay the same or increase! The experts of Energy Management Systems discuss how lighting improvements in your plant can save you up to 60% on your electric costs and take advantage of federal tax incentives to do so. Run time approximately 1 hour. Recorded 03/27/2008