News and Analysis
Whereas PUCO staff has recommended denial of FirstEnergy’s rider proposal, a “virtual” power purchase agreement that could cost customers $3.6 billion, staff has recommended the creation of a “distribution modernization rider” that would allow FirstEnergy to annually recover $131 million per year from customers over the next three years, with a potential two year extension.
One of the stated purposes of staff’s proposal is to enable FirstEnergy to maintain an investment grade rating.
Testifying before the PUCO last week on behalf of the OMA Energy Group, Cooper Tire & Rubber Co. Vice President, Treasurer, Tom Lause, said: “… The corporate bailout proposed by Staff will actually diminish diversity of supply and suppliers and limit consumers’ effective choices over the selection of those supplies and suppliers over the longer term. … The Commission should allow the competitive markets to work and not provide competitive advantages to certain generators.
“… Currently, it is my understanding that there are significant new generation resources scheduled to come online and a healthy capacity reserve margin in the PJM market; therefore, there is no need to raise funds to support one generator’s business over another.
“… Rather than receive a bailout from customers under the Staff’s Proposal, FirstEnergy Corp., similar to all other public companies, should be required to consider and make financial business decisions that would allow it to sustain an investment grade credit rating. …”
This week the OMA Energy Efficiency Peer Network (EEPN) visited The Dannon Company and the Village of Minster solar field to see innovative energy efficiency installations.
If you’d be interested in participating in future plant tours and other EEPN activities, click here. Manufacturing members are invited and there is no charge.
This week the Senate Public Utilities Committee held a hearing to consider Governor Kasich’s recent appointment to the Public Utilities Commission of Ohio (PUCO), M. Howard Petricoff.
Members of the Senate peppered Mr. Petricoff with questions about possible conflicts of interest.
Mr. Petricoff, a respected utility lawyer who recently retired from the Vorys law firm, adeptly handled the questions but the Senate Committee Chair did not call for a confirmation vote.
Committee Chairman Senator Bill Seitz told the media that Senate confirmation would likely occur sometime this summer.
The OMA wrote to Senate President Faber in support of Mr. Petricoff’s appointment. Some utilities are advocating against Petricoff’s appointment since he has represented competitive electricity suppliers.
The OMA Energy Efficiency Peer Network (EEPN) has scheduled a plant tour on Wednesday, July 20 at the Dannon Company, Inc. 216 Southgate Dr., Minster, Ohio 45865. The tour will focus on energy efficiency and sustainability initiatives. A hosted lunch will follow the tour. The event starts at 9:30 a.m. and concludes at 1:00 p.m.
But wait, there’s more! The Village of Minster has graciously agreed to host a tour for the OMA EEPN of its 3 MW solar array and 7 MW lithium-ion battery, the first municipal electric solar-battery system in the U.S. This tour will immediately follow the Dannon tour. Interested members can caravan to the solar site at 1:30 p.m. for a 1-hour tour and discussion.
PUCO staff has recommended denial of FirstEnergy’s rider proposal, a “virtual” power purchase agreement that could cost customers $3.6 billion. That’s the good news.
Staff said the proposed rider does not preserve resource diversity in the state, does not protect Ohio’s local economies from harms associated with plant closures, and could interfere with FERC’s authority over the wholesale markets.
Here’s the bad news: Staff recommended the creation of a “distribution modernization rider” that would allow FirstEnergy to annually recover $131 million from customers over the next three years. One of the stated purposes of staff’s proposal is to enable FirstEnergy’s parent company to maintain an investment grade rating. One of the conditions attached to staff’s proposal is that FirstEnergy must maintain its corporate headquarters in Akron.
So, the pretense that the proposal was to keep generating plants in operation to protect customers from future price increases is gone. It is a bailout. Just as the OMA Energy Group and others have said from the beginning.
The OMA Energy Group will continue its opposition. Customers should not be on the hook for FirstEnergy’s poor business decisions for its generation subsidiary.
Hours after Governor John Kasich appointed veteran energy lawyer Howard Petricoff to the Public Utilities Commission of Ohio, the Ohio Senate President called for formal hearings to determine Petricoff’s qualifications.
In his press statement, Senator Keith Faber said: “Senators have expressed some concerns about Mr. Petricoff’s inability to hear many of the cases pending before the commission due to conflicts of interest involving past legal work.”
The Senate Public Utilities Committee will meet on Tuesday, July 12, to consider the appointment.
Rumor has it some utility companies are advocating against the Petricoff pick.
The OMA supports the appointment of Petricoff, who is eminently qualified, by Governor Kasich.
The OMA Energy Group and a diverse array of interests filed testimony in opposition to FirstEnergy’s bailout proposal pending before the PUCO.
OMA Energy Group witness Tom Lause, VP of Treasury & Tax, Cooper Tire & Rubber Company, characterized the proposal as a corporate bailout and explained that it will have the same negative impact on customers as the original rider proposal. He further explained that the corporate bailout requested by FirstEnergy will make businesses less competitive in the global economy and will thwart their ability to take advantage of low market prices offered by competitive suppliers.
Discovery in the case is ongoing.
This week, in a one-sentence decision, the Supreme Court of Ohio reversed the PUCO’s approval of Dayton Power and Light’s (DP&L) Service Stability Rider (SSR).
DP&L had claimed that the SSR was necessary to make up for lost revenue due to increased customer switching, declining wholesale prices, and declining capacity prices. But opponents argued that the SSR was impermissible because it enabled DP&L to collect transition revenue or its equivalent.
The court did not provide a detailed rationale to justify its reversal of the PUCO; instead, the court simply cited to its decision involving AEP from a few months ago where it found that the PUCO erred in authorizing AEP to collect the equivalent of transition revenue through a charge that was similar to DP&L’s SSR.
It is estimated that DP&L has so far collected about $250 million through the SSR and that another $80 million remains to be collected.
The tour will focus on energy efficiency and sustainability initiatives. Highlights will include corporate sustainability goals in energy, CO2 emissions and water. A hosted lunch will follow the tour.
Eric Burkland, OMA president, issued the following statement today supporting Governor Kasich’s decision to appoint M. Howard Petricoff to the Public Utilities Commission of Ohio:
“Petricoff’s appointment to the PUCO is positive and welcome news for Ohio manufacturers. He brings to his new post at the Commission more than three decades of valuable institutional history and deep industry expertise that will enable him to fairly and effectively balance the needs of energy customers and energy suppliers alike. We look forward to working with Commissioner Petricoff on the energy issues that matter to manufacturers.”