News and Analysis
Ohio’s U.S. Senator Rob Portman this week proposed a major amendment to the Senate Budget Resolution that would “give any state the option to opt-out of greenhouse gas regulations from the Environmental Protection Agency (EPA) if the state determines the regulations would increase retail electricity prices, threaten electricity reliability, or have a negative impact on the state’s economy.”
Portman noted that “compliance costs over the next 15 years could be as much $366 billion if all four of the Clean Power Plan’s building blocks get implemented.”
PJM Executive Vice President, Markets, Andrew Ott told members of the legislative Energy Mandates Study Committee that grid reliability is not in jeopardy due to coal plant retirements.
In his testimony, Ott stated: “(S)hortly after the US EPA issued its final Mercury and Air Toxics Standards rule, PJM began to receive notification of retirements from generation owners. Some of the retirements have already occurred and most will be complete by May 31, 2015. …The operation of the power grid will remain reliable because the PJM forward capacity market is attracting investment in new gas-fired resources and alternative resources… and the PJM’s regional transmission planning process has identified transmission upgrades necessary to maintain reliable power grid operation.”
He added: “PJM has evaluated the impact of potential increases in intermittent resources on the regional power grid and found that such resources can be integrated reliably as long as they are supported with adequate transmission infrastructure upgrades.”
This PowerPoint presentation supplements Ott’s testimony.
Despite the announced shuttering of six coal-fired generating units in Ohio, the Public Utilities Commission of Ohio (PUCO) told the House Public Utilities Committee that it expects new natural gas plants to make up for the generation, and then some.
The PUCO said that the following coal plants will go offline by this summer: NRG Power in Lakeshore, FirstEnergy in East Lake and Ashtabula, AEP Ohio in Muskingum County and Pickaway County, and Dayton Light & Power in Hutchings. These plants generate about 3,400 megawatts (MW) of electricity.
Various project developers will have six new natural gas plants coming online over the next five years, located in Oregon, Middletown, Rolling Hills, Meigs County, Carroll County and Lordstown. They are expected to generate 4,300 MW of power.
The PUCO noted that the regional grid operator, PJM, has responsibility for assuring adequate power capacity in Ohio and the entire 13 state region.
The OMA Energy-Efficiency Peer Network (EEPN), formerly the OMA CHP/WER/EE Work Group, 2015 calendar is set. The EEPN is a peer-sharing, learning group for facility and energy managers charged with managing energy consumption and peak demand in their facilities.
The service was improved for 2015 based on input from manufacturers to include: plant tours hosted by Honda and Crown Battery; peer-learning webinars on efficiency projects; do-it-yourself tools; professional consulting and technical assistance for your energy-efficiency projects.
You can learn more about and join the network here. There is no charge for members.
The upcoming EEPN meeting will address demand response and peak-load contribution (PLC) management via webinar on March 25th from 10:00 – 11:00 a.m. Register here.
In good news, for now, for AEP electricity consumers, the Public Utilities Commission of Ohio (PUCO) this week “declined to adopt the company’s proposed purchase power agreement as it relates to the company’s interests in the Ohio Valley Electric Corporation (OVEC).”
OVEC operates two power plants (one in Ohio) and is co-owned by a number of utilities. AEP has sought to place the financial risk of operating the OVEC plant onto customers, rather than shareholders. In a separate filing, AEP proposes the same risk shifting for other plants. And, in yet another filing, FirstEnergy seeks the same types of customer subsidies for several of its plants.
However, the commission left the door open for considering power purchase agreements in the other cases: “Although the Commission found that the proposed power agreement was permitted under Ohio law, after weighing the evidence of record, the Commission was not persuaded that the proposal would benefit ratepayers.”
The OMA Energy Group opposes these utility proposals in each of the cases pending at the PUCO.
Last fall, OMA members were surveyed by the George Mason University to assess their views on their energy needs, renewable energy, and their preferences for energy policies at the state and national level. A total of 120 people responded to the survey, from 100 companies.
Among the key findings:
- A large majority of respondents say that uncertainty about energy costs makes planning difficult for their companies. They say their companies are very concerned about volatility in their energy costs and price increases.
- Two-thirds of respondents’ companies have made changes over the past five years to reduce energy risks; over half made energy efficiency improvements (57%) and 40 percent signed long-term energy contracts.
- Ninety-five percent of the companies represented in the survey are likely to make efficiency improvements over the coming five years.
- Close to two-thirds of respondents (63%) say that energy investments must have a positive return in two years or less. Over a quarter (27%) are willing to wait three years for positive returns, but only five percent are willing to wait longer than that.
- Forty percent of respondents say their company has an energy conservation goal. The primary motivation for this goal is to reduce the company’s energy costs, but environmental benefits are also an important motivation.
The survey results are used to develop OMA energy services and public policy positions. Here is the survey report: Energy and Ohio’s Manufacturers: Risks, Opportunities & Policy Preferences and a brief summary of key findings.
Rob Threlkeld, Global Manager – Renewable Energy, General Motors, this week made a presentation to the OMA Energy Committee on GM’s principles of waste reduction, energy efficiency, resource preservation and greener vehicles.
Threlkeld discussed with committee members the execution of a large solar project at the company’s Lordstown assembly plant. The 2.2 MW project cost about $4.4 M.
Each quarter, one of the OMA Energy Committee meeting features that members rate most favorably are the electricity and natural gas market trend reports.
This week Richard Ricks, Manager – Large Customer Relations, of Columbia Gas of Ohio presented natural gas market trends, while Susanne Buckley, Managing Partner, Scioto Energy analyzed electricity markets and pricing for Ohio consumers.
This week the Federal Energy Regulatory Commission (FERC) posted the official application from the Rover Pipeline project. This is the next step toward the future construction of the project. In response, Ryan Augsburger of the OMA said in a statement:
“Manufacturers in Ohio and nationwide rely upon reliable access to affordable energy – especially natural gas – to stay competitive and create jobs. Investing in new infrastructure like the Rover Pipeline will allow for further economic expansion in the manufacturing sector. We look forward to FERC’s timely review of the Rover Pipeline.”
Governor Kasich has appointed his commerce department director, Andre T. Porter, as a commissioner at the Public Utility Commission of Ohio (PUCO).
Porter previously served at the commission, prior to his appointment to the commerce department. Porter takes the seat previously held by Steve Lesser.