News and Analysis
In 1999, Ohio moved to allow customers to shop for electricity generation in order to establish the benefits of competition for the state and its economy.
Since that time, through various riders approved by the Public Utilities Commission of Ohio (PUCO), customers have paid $14.57 billion in above-market charges to the state’s utilities. That is, $14.57 billion more than the costs customers paid for the actual electricity they bought from competitive suppliers.
The PUCO just approved another $1 billion in above-market charges for FirstEnergy. Dayton Power and Light has proposed to the PUCO another $1.5 billion in charges. That’d be a total of $16 billion if the DP&L proposal would be approved.
For manufacturers, these riders drain away precious cash that could be used for investment and innovation in Ohio, creating more jobs and more prosperity. Join the OMA Energy Group to help stop this economic madness. 10/17/2016
Last week the Public Utilities Commission of Ohio approved a $1 billion subsidy of FirstEnergy by customers. The ruling will cost customers $204 annually for, likely, five years.
Very large consumers of electricity look to see costs from the rider of $18 million, large users $1.9 million, and medium-sized consumers $140,000 over the period.
See a breakdown by usage here. The OMA Energy Group opposed this costly subsidy, and will continue to litigate it, now that the PUCO has acted. 10/17/2016
This week the Public Utilities Commission of Ohio (PUCO) approved a new “grid modernization” rider that amounts to an unwarranted subsidy for FirstEnergy that will stifle competition, drive electricity costs up and harm manufacturing competitiveness.
Eric Burkland, OMA president, issued a statement commenting on the PUCO decision to allow FirstEnergy to collect up to $1 billion in above-market customer charges:
“Today’s decision by the PUCO to give FirstEnergy a subsidy through a “grid modernization” rider is a setback for electricity consumers in Ohio. If implemented, the rider essentially will serve as another new tax, potentially costing families and businesses $1 billion, while also setting a precedent for the PUCO to grant above-market customer charges to the state’s other utilities to bolster utilities’ financials.
“These unwarranted new costs will put another strain on the budgets of families, particularly those least advantaged, and will harm the competitiveness of businesses, especially those that are energy intensive.
“What do these electricity customers get for the new costs? Pretty much nothing. The customers are being asked to pay FirstEnergy with no direct consumer benefits. The rider is called a “grid modernization rider,” but requires FirstEnergy to do nothing to actually modernize the grid.
“Customers are paying to prop up the finances of a failing company. FirstEnergy should address its own financial troubles by using methods manufacturers and other businesses are required to use – cut costs, sell assets, sell equity – rather than rely on a customer bailout.” 10/12/2016
Dayton Power and Light (DP&L) has amended its Electric Security Plan application to the Public Utilities Commission (PUCO), proposing a $145 million per year “distribution modernization rider.”
The utility says that the rider is necessary to allow it to maintain its financial integrity and to access equity and debt capital in order to finance transmission and distribution infrastructure modernization investments. DP&L also stated that the cash flow from the rider will be used to pay interest obligations on existing debt, make discretionary debt prepayments, and allow DP&L to make capital expenditures to maintain the company’s transmission and distribution infrastructure.
The Ohio Consumers’ Counsel estimates the newly requested rider would cost Dayton-area consumers $1.01 billion over seven years.
The OMA Energy Group is an intervenor in the case to protect manufacturers’ interests. 10/13/2016
The tour will focus on energy efficiency and sustainability initiatives. Highlights will include brew kettle heat recovery; ammonia refrigeration efficiency; and compressed air pressure reduction.
Steel-toed shoes, hard hat, & safety glasses required. Limited hard hats and shoe covers available onsite.
Please register promptly as there are limited spaces remaining. Register here. 10/11/2016
According to the Cadiz Times Recorder, EmberClear Corp. of Houston intends to build a gas-fired power plant near Cadiz in Harrison County. This would be the latest in a series of new gas-fired plants that seek to take advantage of plentiful shale gas.
The company plans a 1,000 megawatt plant on about 60 acres in the Harrison County Industrial Park. The project could provide for the electricity needs of about 1,000,000 houses.
It could take up to three years to obtain regulatory permits before a construction timeline would be developed. The project would lead to a projected investment of $900 million and provide work for an estimated 500 construction workers and 30 permanent workers. 10/6/2016
Executives from Dayton Power & Light (DP&L) are lobbying state lawmakers for a legislative proposal that will be harmful for customers. The utility wants the General Assembly to adopt legislation during the brief post-election lame duck session that would modify PUCO rate-making laws and provide more authority to the regulator. In the package is authority to add new riders on customers’ electric bills if a utility’s fiscal integrity is threatened.
The legislative proposal would also allow utilities to charge customers “transition charges” outside the scope of law today, effectively reversing recent Supreme Court decisions that were favorable to customers. Read more from OMA Energy Counsel, Carpenter Lipps & Leland.
It’s a stunning request of the General Assembly by a utility company. The DP&L legislative proposal is similar to the PUCO proposal of FirstEnergy which asks for up to $8.9 billion in customer-paid subsidies due to its threatened fiscal integrity. Both the FirstEnergy rate case and the DP&L legislative proposal seek to shift ordinary business risk from shareholders to ratepayers.
The OMA Energy Committee will cover this and many manufacturers’ energy issues at its meeting on November 17. Members can register here. 9/29/2016
State-established electric utility energy efficiency and renewable energy standards were frozen by legislation in 2013. The freeze is due to expire in early 2017. Some lawmakers are eager to act on the issue during the upcoming lame duck legislative session. This week, Governor Kasich renewed his intention to veto any bill that weakens or eliminates the standards. Read more in the Cleveland Plain Dealer.
The governor was reacting to a plan recently updated by Senator Bill Seitz, Chair of the Senate Public Utilities Committee, that would end the freeze in December while softening the “standards” into “goals” and make other changes. 9/29/2016
Manufacturers can bid for larger incentives for their efficiency projects in AEP Ohio’s upcoming Bid4Efficiency auction. The auction provides a mechanism for manufacturers to earn efficiency incentives that are greater than AEP’s $25,000 maximum.
To receive incentives above the $25K cap, AEP Ohio’s Bid4Efficiency program offers a reverse auction where entities start at $0.08/kWh saved for incentives, and then bid down to the price at which they are willing to take an incentive.
An RFQ submittal is necessary to secure AEP pre-approval to participate in the auctions; RFQs are due by October 14, 2016. The RFQ is short, requests only basic information, and can be completed in a short period of time.
Multiple auctions will be held between Nov. 7-11. Auctions will be for different sized pots of money for both lighting and custom project kWh savings. A customer may only win one auction.
OMA’s energy consultant is ready to help you navigate the process, assist with completing the RFQ, and can advise you on a bidding strategy. Contact John Seryak for further assistance as a benefit of your OMA membership. 9/27/2016
New case studies of Ohio manufacturers Crown Battery and Nissin Brake by the Alliance for Industrial Efficiency highlight the potential of energy efficiency savings. “My advice to other manufacturers? You need to take advantage of this,” said Matt Culbertson, energy engineer for Crown Battery.
According to the case studies, Crown Battery is saving $150,000-$210,000 annually, and engages plant workers by awarding “Save a Buck Dynasty” t-shirts to those with energy saving ideas. Nissin Brake has saved a cumulative $3.4 million in energy costs since 2008.
Energy efficiency savings like these have the potential to add up to an eye-popping $298 billion for the U.S. manufacturing sector through 2030, according to a study simultaneously released by the Alliance. The study investigated how manufacturing energy-efficiency can serve as a low-cost resource if carbon regulations come to fruition. Ohio ranked 5th in terms of cumulative cost saving potential and 2nd in terms of emission reduction potential. 9/28/2016