News and Analysis
The Midwest CHP Technical Assistance Partnership (of the U.S. Department of Energy) is offering a free economic assessment of combined heat and power (CHP) as a compliance option for manufacturers effected by boiler MACT regulations.
The timeline for the free assessment is running short. If you are potentially interested in this assessment, please contact OMA’s energy engineer partner, John Seryak, yet this year.
The Ohio House Public Utilities Committee this week heard opponent testimony on House Bill 302, the companion legislation to Senate Bill 58, from Ohio Partners for Affordable Energy. The group’s executive director, Dave Rinebolt, told the committee that the measure would result in greater compensation for utility companies at the cost of Ohio ratepayers.
Rinebolt’s remarks included an overview of how energy efficiency impacts cost in a deregulated marketplace such as Ohio.
On Tuesday, December 17, the Public Utilities Commission of Ohio (PUCO) will host an “Energy Risk Lab.” This interactive simulation will “pit teams of energy experts against each other as they develop new and unique approaches to the challenges facing the energy industry. The workshop will simulate real-world situations to explore how various strategies, tools and policies can help or inhibit meeting the challenges facing the utility industry in the coming decades.”
This lab was developed by the National Association of Regulatory Utility Commissioners (NARUC), which has run “tabletop emergency scenario workshops and simulation games that help regulators and public- and private-sector partners practice going through cyber-attacks, natural disasters and other incidents that challenge reliability, to help them find the approaches that work best. Since 2010, NARUC used this model to help regulators become ready for challenges that are caused by policy, technology and market activities, instead of just emergencies.”
Read more about the labs.
The 13th annual PwC Annual Global Power & Utilities Survey finds: “Many in the industry expect the existing power utility business model in their market to transform or even be unrecognizable in the period between now and 2030.”
Utility executives surveyed globally see: “The growth of distributed generation and its threat to the power utility business model depends on technological developments and cost. Its rise in Europe has been subsidy-driven. Cost barriers remain in the way of it being truly market-driven. But, if these barriers can be overcome, they could set the scene for widespread global industry transformation. Many believe that point is within reach. Energy efficiency, falling solar prices, demand-side management and smart grid technology head the list of technological developments that the industry believes will have the biggest impact on their power markets.”
As to fuel sources: “…new sources of fossil fuel supply will also have a major impact on the power market. The advent of shale gas and tight oil are changing the economics of the energy landscape. Peak oil forecasts are fast being revised. The prospect of North American energy independence is within reach and the geopolitics of world energy flows are in flux. Industry opinion is far from ruling out the possibility that a new abundant energy era might open up. But alongside this, there is a significant degree of societal concern about extractive activities and a feeling that renewable energy can bring benefits and is here to stay.”
The Senate went into holiday recess without a committee vote on Senate Bill 58, the controversial and costly proposed rewrite of state energy policy. Senate Public Utilities Committee chairman Sen. Bill Seitz (R-Cincinnati) unexpectedly cancelled the hearing in which a vote had been planned.
In a summary of the latest substitute bill sent to the Senate Tuesday, the OMA said: “The most recent substitute bill (Nov. 25, 2013) fails to address many critical substantive and technical concerns raised by customers about the previous version of the bill. In its current form, the legislation remains a huge giveaway to utilities and threatens to wipe out billions of dollars in projected energy savings for Ohio businesses and residents.”
In a letter to the Senate, also delivered Tuesday, Consumers’ Counsel Bruce Weston noted that “33 states have residential electricity prices that, on average, are lower than electricity prices for consumers in Ohio…Ohio’s four million households could pay, on average, as much as $528 more for their electric service under Senate Bill 58, over a utility’s three-year energy efficiency plan…
Ohio’s businesses could pay, on average, as much as $3,291 more for their electric service.”
In a statement Senator Seitz vowed to continue to fight “”envirosocialist mandates that have afflicted Ohio ratepayers through hidden charges and fees on their electric bills.”
The Akron Beacon Journal editorialized after the vote cancellation: “It makes sense to examine and, if necessary, adjust the standards five years after their enactment. Unfortunately, the Seitz bill goes way too far… appearing to do the bidding of power companies more than anything else.”
An updated analysis by researchers at the Ohio State University shows that Senate Bill 58 would cost Ohio customers even more than originally estimated. The updated analysis shows Ohioans would pay $3.94 billion more in electricity bills over the next dozen years, with annual increases of $302.8 million.
The study projects electricity bills 3.7% higher under Senate Bill 58 than under current law.
That $302 million additional cost in utility bills every year is an amount that would pay manufacturing wages ($55,318 on average) for 5,490 Ohioans, every year.
Read a media release on the study.
Joined by a broad coalition of opponents to Senate Bill 58, the OMA proposed a comprehensive amendment to the bill. In its current form, the bill provides utilities with unjustified and unprecedented benefits at the expense of all ratepayers.
The amendment removes all of Senate Bill 58’s proposed changes that would raise electricity bills, such as the 33 percent tax utilities would be able to collect from consumers on savings. It also removes provisions that water down the energy efficiency standards by eliminating provisions such as allowing utilities to count old power plant upgrades toward the energy efficiency benchmarks.
The amendment retains the streamlined industrial opt-out program that will provide Ohio’s biggest electricity consumers an alternative way to be exempted from the program if they’re already doing energy efficiency.
The diverse coalition supporting the amendment includes the Office of the Ohio Consumers’ Counsel, Ohio Partners for Affordable Energy, the Ohio Environmental Council, Ohio Advanced Energy Economy, the Ohio Hospital Association, the Environmental Defense Fund, and the National Wildlife Federation.
Read a press release on the amendment.
This week the Ohio Ballot Board gave the okay to “Yes for Ohio’s Energy Future” to collect signatures to put a constitutional amendment on the 2014 November general election ballot that would require the state to issue bonds in order to spend $1.3 billion a year for a decade to make investments in green energy infrastructure: solar, wind, biomass, battery-technology, and geothermal energy, among other technologies.
The amendment would allow all green energy investments to be controlled by an out of state corporation called the Ohio Energy Initiative Commission. The group was incorporated in the state of Delaware in January 2012. It is not known who these people are.
The group needs to secure 385,247 qualified signatures of registered Ohio voters. Read the initiative petition.
The controversial and costly Senate Bill 58 has been scheduled for a vote in the Senate Public Utilities Committee next Wednesday at 2:30 p.m. A research group at Ohio State University projects the bill will cost Ohio electric ratepayers $3.65 billion over 12 years. A separate study commissioned by the OMA found the bill would wipe out $2.5 billion in projected savings from energy efficiency from 2014 through 2020.
OMA has opposed Duke Energy’s request that ratepayers be saddled with the costs of remediating long out-of-service manufactured gas plants (MGP), because the plants are not, and haven’t been for a long time, “used or useful,” a long-standing PUCO yardstick for putting costs on ratepayers, rather than shareholders.
This week, the PUCO ordered that Duke Energy could collect a great deal of those costs from ratepayers.
In a summary from OMA energy counsel, Kim Bojko, Carpenter Lipps & Leland LLP, Bojko says: “The Commission authorized Duke to recover, amortized over 5 years, a majority of the $62.8 million it requested from customers … The Commission found that the used and useful standard does not apply to the remediation of MGP sites because Duke is under a statutory mandate to remediate the former MGP sites and therefore did not make a determination as to whether the sites were used and useful in the provision of utility service.”
And: ” … the participation of Columbia Gas in the case, and the manner in which the Order is drafted will open the door for all of the other utilities that have MGP sites to request similar cost recovery from customers.”