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News and Analysis

FirstEnergy Energy-Efficiency Program Update

January 23, 2015

FirstEnergy has suspended its energy-efficiency programs for 2015 and 2016 as provided for in S.B. 310.  As a result, rebates for energy-efficiency projects are no longer available to FirstEnergy customers.  However, customers will still be charged for the program via a rider unless they earn a rider exemption through the “Self-Direct” option (or exercise an opt-out option which is available only to very large “above-Primary voltage” electric service customers).

OMA urges manufacturers served by FirstEnergy to evaluate the Self-Direct out-out option to see if they qualify for a rider exemption.

Additionally, manufacturers can still receive incentives from PJM (the regional electric grid operator) for contributing their qualifying energy-efficiency projects to the capacity market through certain third party providers.

Contact OMA energy consultant John Seryak to see if your company can qualify for the FirstEnergy Self-Direct option, and to determine your eligibility for PJM capacity incentives.  Self-Direct applications are available on FirstEnergy’s website (see Mercantile Customer Program).  Please use OMA administrator code 50941 when applying for the Self-Direct exemption.

Study Committee on Ohio’s Energy Standards Prepares to Convene

January 23, 2015

This week the returning co-chair of the Energy Mandates Study Committee created by SB 310, Sen.Troy Balderson (R – Zanesville), in an interview with Gongwer News Service announced plans for upcoming hearings of the legislative panel.

The sponsor of SB 310, Balderson said he intends to dive into 111(d) –  the U.S. EPA proposal under the Clean Air Act to regulate greenhouse gas emissions from power plants and other stationary sources – by inviting presentations from Ohio EPA and the Public Utilities Commission of Ohio.  The agencies made public comment to the U.S. EPA in opposition to the proposal on behalf of the state of Ohio.

A formal committee announcement has not yet been issued nor has Speaker Rosenberger appointed a House co-chair of the study committee.

PUCO Submits Commissioner Candidates to Governor

January 23, 2015

The Public Utilities Commission of Ohio (PUCO) Nominating Council met this week to interview applicants for the position of commissioner of the PUCO to fill a five-year term commencing on April 11, 2015.

As a result, the Nominating Council submitted these four finalists to Gov. John Kasich for his consideration: John W. Honabarger, Lancaster; Steven D. Lesser, Bexley; Andre T. Porter, Gahanna: and Tom Waniewski, Toledo.

Gov. Kasich has 30 days to select a nominee or request a new list of names from the Nominating Council.  The governor’s appointment is subject to confirmation by the Ohio Senate.

The PUCO Nominating Council is a broad-based 12-member panel charged with screening candidates for the position of commissioner.

AARP Opposes Power Purchase Agreements

January 16, 2015

The PUCO is expected to rule soon on the first of several pending applications filed by distribution utility companies to gain approval to pass new costs to customers via ‘power purchase agreement’ (PPA) riders regardless of a customer’s electric supplier.

Late last week the AARP announced its opposition to the proposals which they estimate will cost customers an addition $3 billion over the next 15 years.  The AARP announcement condemns the proposal as, “contrary to the Ohio law that opened markets to competition 15 years ago.”

Porter Pursuing PUCO Position

January 16, 2015

Andre Porter, Director of the Ohio Department of Commerce, recently applied for appointment to the 5-member Public Utilities Commission of Ohio (PUCO).  Porter served as a PUCO commissioner prior to his appointment to the governor’s cabinet.

He applies for the seat presently occupied by Steven Lesser who has applied for reappointment.  Governor Kasich, who appoints commissioners, is expected to make his decision prior to the April 10 term expiration.

The Cleveland Plain Dealer details the sixteen candidates who have applied for the post.

Economist Hill Testifies for OMA in FirstEnergy Case

January 9, 2015

Dr. Edward W. Hill, Dean of the Maxine Goodman Levin College of Urban Affairs at Cleveland State University and Professor of Economic Development, testified on behalf of the OMA Energy Group in opposition to the FirstEnergy proposal to mandate purchases of power from its generation affiliate, FirstEnergy Solutions.

Hill stated:  “FirstEnergy’s Program and strategy to utilize a power purchase agreement seek a massive subsidy from state ratepayers to fund FirstEnergy’s non-regulated subsidiary’s aging and inefficient electric generating units. Such a Program, if implemented, would fundamentally distort the electricity wholesale energy markets. It would shift the risk of market failure from FirstEnergy’s generation affiliate to FirstEnergy’s distribution consumers – undermining the intent of the Ohio General Assembly when it restructured Ohio’s electricity markets in 1999.”

“FirstEnergy’s Program strategy essentially provides FirstEnergy, and its affiliate, with a guaranteed return on its generating assets. The strategy directly undermines the competitive nature of the retail market for electricity in Ohio. It does this by introducing subsidized generation into both the energy and the capacity markets, thereby distorting those markets, and potentially driving lower cost generation out of the market,” Hill said.

Hill noted the proposal would produce particularly harmful effects on energy-intensive manufacturers, upon which the Ohio economy relies.

AEP Ohio Considers Sale of Unregulated Power Plants

January 9, 2015

Following an industry trend in deregulated states, AEP Ohio this week announced it has hired Goldman Sachs to consider the sale of its unregulated generation fleet.

“AEP is among the publicly traded electric utilities that have raised concerns about the difficulty of owning power plants in Ohio’s deregulated market.  Unlike in many other states, power plants compete on an open market,” according to a Columbus Dispatch story which also noted Duke Energy’s recent sale of its unregulated plants.

Trade publication Utility Dive describes the moves as “abandoning the volatility of unregulated electricity markets and returning to their core business as rate-regulated utilities.”

The potential affect on manufacturers as well as updates on all current energy issues affecting manufacturing will be on the agenda of the OMA Energy Committee on February 25.  Register today.