News and Analysis
The Public Utilities Commission of Ohio (PUCO) recently opened an investigation into whether it should order rate cuts to reflect the federal tax cut, from 35% to 21%, from which Ohio electric utilities are now benefiting. Public utilities commissions in other states are taking similar action, and most utilities appear to be cooperating in the matter. Not in Ohio.
This week, Ohio’s four electric utilities joined together to produce a raft of legal objections to having to set aside revenue for possible refunds. Their objections are rooted in the state’s faulty ratemaking statutes, statutes that need to be reformed, and would be if the legislature would act on HB 247, sponsored by Rep. Mark Romanchuk (R-Mansfield). 2/15/2018
This week the OMA joined a chorus of supporters in offering proponent testimony for House Bill 143, a bill that will prevent the state tax department from collecting kilowatt hour tax on electricity that manufacturers produce onsite by modifying the definition of “electric distribution company” for kilowatt-hour tax purposes.
As manufacturers increasingly utilize renewable energy and other forms of onsite generation, the clarification of tax law that HB 143 provides supports energy innovation and manufacturing competitiveness. 2/15/2018
National and state energy leaders will convene in Columbus March 6-8, and March 20-22 to discuss the electric distribution system of the future and how state policy can facilitate grid enhancements that work to better customers’ lives.
PowerForward takes place at the PUCO’s offices at 180 E. Broad St., Columbus. The event is free to attend and there is no registration required. PowerForward will also broadcast live online by The Ohio Channel. 2/8/2018
Supporters of the proposed bailouts of Ohio’s two nuclear plants seek support from local elected officials based on the impact of potential plant closures.
What’s not been analyzed is the impact of the bailouts on the local economies. So, we took a look at one of the plants.
The bailouts would cost the residents and businesses in Lake County up to $94 million! An economy punishing $94 million. 2/1/2018
OSU economist Ned Hill testified before the House Public Utiltiies Committee this week in support of utility regulation reforms contained in HB 247 (Romanchuk, R-Mansfield).
“The electricity markets are working in Ohio and benefiting consumers and employers, one for electricity generation and the other for capacity. There is no economic rationale for introducing subsidies into the electricity markets; they amount to nothing more than corporate welfare,” Hill said.
These subsidies are paid through non-bypassible riders on customers’ bill; those riders now exceed the cost of transmission or distribution costs for the average mercantile customer. Transmission charges are 8% of the average cost. Distribution charges are 13% of the final cost. And, PUCO approved non-bypassable charges are 14% of the bill. 1/25/2018
This week the Supreme Court of Ohio issued an opinion (case summary) finding that the PUCO cannot order the FirstEnergy power companies to refund $43 million to customers for the “imprudent” purchase of renewable energy credits made in 2010.
“This decision negatively impacts the ability of the PUCO to protect customers against the utilities from collecting imprudent expenditures. The Court’s decision will send shockwaves through the industry, halting rider rate approvals and changing the regulatory paradigm,” wrote OMA energy counsel Kim Bojko of Carpenter Lipps & Leland in a briefing to members of the OMA Energy Group.
The ruling further justifies the need for regulatory reforms contained in House Bill 247 (Romanchuk, R-Mansfield) that protect customers from above-market power charges. 1/25/2018
FirstEnergy to Exit Competitive Generation, but Asks General Assembly for Nuclear Power Plant SupportJanuary 26, 2018
In the same week that FirstEnergy announced an investor group would provide $2.5 billion to enable the company to offload unprofitable generation liabilities, the Akron-based utility appeared in a Statehouse hearing room to urge lawmakers to pass Senate Bill 128 to require Ohio customers to bailout unprofitable nuclear power plants.
Sam Belcher, Chief Nuclear Officer, FirstEnergy, said in testimony: “The updates to the legislation offered by Senator Eklund in October balance the costs to customers of creating a clean energy jobs program with the benefits received from keeping Ohio’s nuclear plants operating. The legislation is expected to generate approximately $180 million annually. While this is less than the original legislation and does not provide the same long-term certainty, it increases the likelihood of keeping Davis-Besse and Perry operational throughout the life of the program.”
Mark Stahl, an Ottawa County Commissioner, also attended the hearing to testify for the bailouts in the name of fuel diversity.
The OMA opposes efforts that shift utility business risk from investors to customers. 1/25/2018
The OMA and a member company this week urged the House Public Utilities Commission to reform electric utility laws that are taking billions of dollars out of consumer pocketbooks.
OMA energy counsel Kim Bojko debunked various claims that utilities have made to the committee over previous hearings on HB 247 (Romanchuk, R-Mansfield). She testified: “HB 247 furthers many of the original objectives of the deregulation bill passed in 1999. It promotes competitive electric markets and ensures effective competition by avoiding anticompetitive subsidies …10 years later, the market has developed and competition is working and saving customers billions of dollars. … it is time to move forward and allow the markets to work without government intervention and without above-market charges imposed by regulated utilities.”
Geoff Korff, President, Quaker City Castings, urged the committee to support the bill, saying that current law “allowed for utilities to seek and obtain approval for a whole host of above market, non-bypassable charges on customer bills. These charges are disrupting customers’ ability to save money by shopping their electric loads. My own company has seen its distribution rates increase by 34% in the past three years while my generation rates have come down.
“Passing HB 247 will improve the state’s competitiveness by allowing customers to take advantage of the innovative offerings the competitive market is developing without being encumbered by various non-bypassable charges that do little to nothing to benefit customers.” 1/18/2018
Revised net metering rules were adopted by the Public Utilities Commission of Ohio (PUCO) in its November 8, 2017 order. On January 10, 2018, the PUCO heard oral arguments from interested parties regarding the rules.
Issues of interest to manufacturers that were raised include: 1) the form and amount of compensation available to net metering customers for excess generation; 2) the availability of net metering tariffs to shopping customers, and; 3) the rules governing which facilities qualify for net metering.
Here is a good summary of the arguments from Kim Bojko of Carpenter Lipps & Leland, OMA’s energy counsel.
The PUCO will take the oral arguments into consideration when rendering its decision adopting final net metering rules. 1/18/2018
The Republican polling firm, Public Opinion Strategies, last month fielded a survey of Ohio voters who identify as Republican or as conservative independents regarding energy policies in the state.
According to a memo from Public Opinion Strategies: “The survey results show that conservative voters throughout the state overwhelmingly support policies that encourage greater production of renewable energy and increasing energy efficiency, including a renewable energy standard and revising wind set-back rules to better accommodate turbine siting. Moreover, they reject surcharges to shore up existing coal and nuclear power, and attempts to erode consumer options among electricity providers. Overall, seven-in-ten conservative voters would advise GOP candidates in the state to support those policies, and say that if it were up to them fully half of the state’s electricity would come from renewable energy.”
Read more about the poll results here. 1/18/2018