News and Analysis
Hill stated: “All of the (investor owned utilities) share two goals. The first is to use the power of either the PUCO or the Ohio Legislature to mandate the purchase of expensive existing Ohio power plants first and to ensure that competitive market forces do not force them to either write down the asset-value of their generating assets, protecting their stock values, or to close the plants. The second is to upend, circumvent, and destroy the competitive electricity generating market managed by PJM Interconnect.”
With regard to the massive subsidies proposed by the bill, he said: “Keeping expensive and technically obsolete nuclear power plants in subsidized operation will be a barrier to lower-cost, lower-carbon electricity production.”
The day after this week’s hearing, the chairman of the House Public Utilities Committee, Rep. Bill Seitz, announced that hearings on the measure will be suspended for now. 5/18/2017
Public Utilities Commission of Ohio (PUCO) Commissioner Beth Trombold came to the OMA to talk about the commission’s initiative “PowerForward.”
PowerForward focuses on the grid of the future, and how to optimize deployment of new and emerging technologies. The commission has scheduled a series of meetings for input from expertise in multiple fields. 5/18/2017
Pictured: M. Beth Trombold, PUCO Commissioner, and OMA Energy Committee Chairman, Brad Belden, VP Administrative Services, The Belden Brick Co.
Thomas Lause, Vice President, Treasurer, Cooper Tire & Rubber Company, this week testified on behalf of the OMA in opposition to HB 178 and its proposed multi-billion-dollar bailout of FirstEnergy’s uneconomic, uncompetitive nuclear power plants in Ohio. Lause is an OMA director and serves on the finance committee of the OMA board.
“We are keenly interested in public policies that will drive lowest cost energy resources and solutions – rather than policies that will impose billions of dollars of unwarranted, anti-competitive, above market charges on our businesses,” Lause testified.
“If enacted as introduced, House Bill 178 would cost FirstEnergy’s customers an estimated $300 million a year, for up to 16 years, to subsidize two Ohio nuclear power plants operated by FirstEnergy’s subsidiary, FirstEnergy Solutions. That adds up to $4.8 billion.”
If enacted, this bill would pile onto the billions of dollars of above-market charges Ohio utilities have been able to put on customers’ bills. 5/11/2017
This week, members of a senate committee heard from SB 128 bill sponsors Senators John Eklund (R-Chardon) and Frank LaRose (R-Copley). SB 128 (and companion legislation HB 178) would impose non-bypassble riders on FirstEnergy customers to subsidize its nuclear plants. The proposal mandates $300 million annually in new customer charges for up to 16 years.
The senators testified: “Wholesale electricity prices are artificially and unsustainably low, making it nearly impossible for nuclear plants to operate in Ohio and nearby states.”
The OMA joined a coalition with the Ohio Chemistry Technology Council, AARP and others in opposing the legislation.
“This proposed nuclear bailout will hurt current Ohio businesses and could stop new businesses from investing in Ohio,” said OMA director, David W. Johnson, CEO, Summitville Tiles, Inc. “Senate Bill 128 and House Bill 178 will increase the cost of doing business in FirstEnergy’s territory.”
In a coalition press release, OMA V.P. and Managing Director of Public Policy Services Ryan Augsburger, said “Manufacturers support nuclear power as part of an ‘all-of- the above’ energy portfolio, but Senate Bill 128 is a wolf in sheep’s clothing. The legislation would impose an unwarranted new multi-billion- dollar tax on Ohio businesses and families, stunt innovation and discourage investment in new generation assets in our state.” 5/4/2017
Against the backdrop of the PUCO’s PowerForward discussion on the future of electricity, the OMA Energy Group (OMAEG) this week filed testimony on AEP Ohio’s plans for micro-grids, renewable energy, submetering, and electric vehicle charging stations.
OMAEG’s testimony pointed to concerns with AEP Ohio’s request to own assets that are currently obtainable through competitive markets; the lack of time-of-use pricing with the advanced technologies; and the dearth of details, as well as the undefined, unlimited estimated costs to customers (including capital costs, carrying costs, and ongoing operation and maintenance costs). 5/4/2017
The recently introduced nuke bailout bill, Senate Bill 128, would cost FirstEnergy ratepayers $300 million a year for up to 16 years to subsidize two Ohio nuclear plants.
It gets worse: the legislation appears to require Ohioans to subsidize out-of-state nuclear generation. FirstEnergy generates nuclear power in Pennsylvania.
FirstEnergy CEO Chuck Jones testified on the House bill this week. Under questioning, he insisted that these above market charges were neither a bailout nor subsidies. Legislators seemed skeptical of that statement. 4/20/2017
Beginning in 2015, PJM Interconnection has produced a series of papers examining how aspects of its operations, planning and markets could and should evolve given the changing landscape of the electric power industry.
The latest work paper, PJM’s Evolving Resource Mix and System Reliability, “evaluates the changing resource mix in PJM given environmental regulations, the preponderance of low-cost natural gas, the increasing penetration of renewable resources and demand response, and the potential for retirements of nuclear power resources.”
PJM’s resource mix has diversified over recent years. The study finds that the mix consisted of 91% coal and nuclear resources in 2005. In 2016, that had changed to 33% coal, 33% natural gas, 18% nuclear and 6% renewables including hydro.
The study’s conclusion: “The expected near-term resource portfolio is among the highest-performing portfolios and is well equipped to provide the generator reliability attributes.”
That is: for those worried about reliability in the face of electricity system change: relax, it’s good. 4/20/2017
This week, Rep. Anthony DeVitis (R-Uniontown) introduced House Bill 178. Dubbed the FirstEnergy “nuke bailout” bill, the measure would require customers in the FirstEnergy service territory to pay an additional $300 million annually on electric bills to subsidize the Perry and Davis-Besse power plants for up to16 years.
Under the bill, manufacturers would not be able to “shop around” the rate increase that will be imposed on all distribution customers, regardless of their energy supplier.
The OMA opposes the legislation. 4/13/2017
Senate Bill 128 and companion House Bill 178 create a new above-market charge on all customers in the FirstEnergy service territories that would be used to subsidize the two nuclear power plants operated by FirstEnergy’s subsidiary, FirstEnergy Solutions.
Manufacturers in FirstEnergy territory that use about 1,000,000 kWh/year and spend about $100K per year now for electricity would see an annual incremental cost of $5,700. Over the 16 year term, they would pay an additional $91,000.
Large manufacturers that use 100,000,000 kWh and spend approximately $6 million per year now for electricity would see an annual jump of $567,000. They would pay over $9 million more over the 16 year life of the proposed term.
To calculate your potential exposure to the legislation, multiply your annual kWh usage by $0.00567. 4/13/2017
Senator John Eklund (R-Chardon) this week introduced Senate Bill 128. The legislation imposes a new above-market charge on all customers in the FirstEnergy service territories. The revenue will be used to subsidize the two nuclear power plants operated by FirstEnergy’s subsidiary, FirstEnergy Solutions.
FirstEnergy Solutions is financially stressed, and potentially facing bankruptcy, the company has said. This bill is the latest in a series of attempts by the company to shore up its finances on the backs of its distribution customers.
The bill provides hundreds of millions per year for up to 16 years and can be increased by state regulators. Customers would not be able to “shop around” the charges.
The OMA opposes the bill. OMA president Eric Burkland issued a statement saying: “FirstEnergy should not be allowed to prop up its business on the backs of Ohio consumers. While manufacturers support nuclear power as part of an all-of-the-above energy portfolio, Senate Bill 128 is wolf in sheep’s clothing.” Read the full statement here. 4/6/2017