News and Analysis
Duke Energy announced the sale of its Midwest merchant power business to Texas-based Dynegy for $2.8 billion in cash. The sale includes ownership of 11 power plants and Duke Energy Retail Sales, the company’s competitive retail business in Ohio.
Nine of the power plants are located in Ohio, one is in Illinois and one in Pennsylvania. Duke Energy Ohio, the regulated distribution utility, is not a part of the transaction.
Duke said it will focus on its regulated businesses. Meanwhile, Dynegy is counting on an improved wholesale market (higher prices) for its new generation.
The transaction continues the consolidation occurring in power markets.
Earlier this year, Indiana repealed statewide energy efficiency standards on distribution utility companies. Legislation required state regulators to conduct a cost-benefit analysis of the now discontinued energy efficiency programs.
The findings? $3 of benefits for every $1 of cost in the aggregate. For solely the commercial and industrial sector: the same $1 of cost yielded $5 of savings.
Here’s the report.
OMA Energy Guide helps members find the best energy rates & terms and smart energy management strategies.
At Energy Guide, members enter just a bit of information about their company’s energy use to receive custom energy management recommendations. Then, with that game plan in hand, they proceed to pricing quotes and more.
Energy Guide sifts competitive electricity offers from more than 30 suppliers to find the best rate and terms.
“In Ohio’s deregulated electricity market, it’s important to know how to get the best price and terms. We created Energy Guide to help manufacturers reduce price risk and save management time,” said OMA’s Ryan Augsburger, Managing Director, Public Policy Services.
The Partnership for a Better Energy Future (PBEF) has developed a useful document that summarizes key points about the aggressive U.S. EPA’s proposed carbon regulations.
The document is designed to communicate simply the issues raised by the regulations: legal problems, economic impacts, electricity reliability, global context, process and timeline, lack of flexibility, technological achievability, use of 2012 as a baseline, and follow-up regulations on other industries.
It is a good document to share with elected officials.
In it Q2 earnings call, FirstEnergy announced a retreat from the Ohio retail market and a plan to ask the Public Utilities Commission of Ohio (PUCO) to reregulate some of its generation plants.
FirstEnergy CEO Tony Alexander said: “(W)e intend to exit the medium commercial and industrial or MCI and mass market retail channels as existing contracts expire, but we will continue to serve strategic large industrial and commercial customers as well as our governmental aggregation…”
Leila Vespoli, Executive Vice President, Markets and Chief Legal Officer, discussed the company’s recent PUCO filing to provide electric service for a three-year term from June 1, 2016 through May 31, 2019.
She said: “We have named this plan, Powering Ohio’s Progress, as it provides numerous benefits that support reliable electric service, uplift our customers from volatility and retail price increases and encourages growth and development of the State’s economy.
A highlight of the plan is the Economic Stability Program which provides for a rider to cover the cost associated with the proposed purchase power agreement between the Ohio utilities and FirstEnergy Solutions.
The proposed PPA would dedicate the output of Davis-Besse, SAMA and a portion of OVEC for approximately 3,200 megawatt or an average of approximately 23 terawatt hours annually beginning in June 2016 and running through May 2031.”
In other words, the company would like to return to a regulated rate for that load, paid for by a rider on customer bills.
Members of the OMA Energy Group this week held a discussion with Kerry Stroup of PJM Interconnection and Tom Johnson, Chairman of the Public Utilities Commission of Ohio. Stroup described trends in electricity capacity and generation pricing. Chairman Johnson discussed with the group the operation of the commission, as well as the state process for responding to the federally proposed carbon regulations of power plants.