News and Analysis
The U.S. Chamber’s Institute for 21st Century Energy ranking of the states finds Ohio a “national leader in energy production and as a result, is also home to several blossoming supply chains that support state-based energy industries, including coal, oil and gas, nuclear, and renewable energy.”
With the 7th largest state GDP and 7th largest population, Ohio ranks 8th in electricity production, 11th in coal production, 18th in crude oil production, 18th in marketed natural gas production, 18th in nuclear power generation, and 18th in overall energy production.
At the lower end of its rankings, Ohio has the 27th most affordable retail price for electricity and is 45th in renewable electricity generation.
This week, Mike Kaser, Director of Engineering and Technology, and John Rosenburg, Senior Manager of Construction and Sustainability, of Whirlpool Corporation’s Findlay Division, the largest manufacturer of dishwashers in the world, briefed OMA Energy Committee members on a major wind energy project.
Two wind turbines were added to reduce the facility’s energy costs and reduce its manufacturing carbon footprint (also, three other turbines were developed for neighboring Ball Corp.). Here’s the PowerPoint presentation.
On May 13, 2015, the Public Utilities Commission of Ohio (PUCO) approved the results of AEP Ohio’s second wholesale auction that will ultimately determine its retail generation service rates through May 2018.
The results from this auction, combined with the prices from the auction held April 28, 2015 (April 28 Auction), will be blended to create AEP Ohio’s price-to-compare for the delivery period of June 1, 2015 to May 31, 2016.
At the auction, six competitive suppliers submitted winning bids for a one-year product to supply electricity to AEP Ohio’s customers, which resulted in an average clearing price of $55.42 per megawatt hour (MWH) for the delivery period of June 1, 2015 to May 31, 2016. Winning bids for a one-year product at the April 28, 2015 auction yielded an average clearing price of $53.79 per megawatt hour (MWH) for the same delivery period.
Also bid was a two-year product, with six competitive suppliers submitting winning bids for an average clearing price of $54.70 per MWH for the delivery period of June 1, 2015 to May 31, 2017. Winning bids for a two-year product at the April 28 Auction yielded an average clearing price of $53.51 per MWH for the same delivery period.
Further, six suppliers submitted winning bids for a three-year product with an average clearing price of $56.35 per MWH for the delivery period of June 1, 2015 to May 31, 2018. Winning bids for a three-year product for the same delivery period yielded an average clearing price of $55.58 per MWH at the April 28 Auction.
On the whole, the prices associated with the winning bids in this week’s auction were higher than the previous average clearing price of the winning bids for each of the products listed above.
For additional information, see this PUCO press release.
Members of the OMA Energy Efficiency Peer Network (EEPN) toured Honda’s Marysville Assembly plant this week to learn about process innovations that are driving down energy consumption and reducing waste and emissions.
Technologies demonstrated included hydrogen fuel cell lift trucks, onsite hydro-generation, and styrofoam densification.
The OMA EEPN is open to OMA’s manufacturing members. Learn more here.
Ohio law permits net metering, which is a billing arrangement that enables customers who produce their own electricity to receive credit on their utility bills for any surplus electricity that flows back into the electric utility’s distribution system. Net metering is often an important component of financing certain alternative energy projects, such as rooftop solar.
However, after a series of applications for rehearing by various interested parties on the net metering provisions, the Public Utilities Commission of Ohio (PUCO) issued an order in March finding that additional input pertaining to the net metering rules would be beneficial.
In addition to the PUCO’s ongoing review, the issue of net metering is also before the Ohio Supreme Court and, potentially, the Ohio General Assembly. Read more about the net metering state of play from OMA Connections Partner Bricker & Eckler LLP.
The U.S. Supreme Court decided this week that it will hear the case over Federal Energy Regulatory Commission (FERC) Order 745. The court will review a D.C. Circuit Court decision to strike down Order 745, which gives FERC jurisdiction to regulate demand response in wholesale energy markets.
This is good news for Ohio manufacturers, as demand response lowers power rates. Demand response, in effect, competes with generation. Generators oppose Order 745.
The case will come before the high court in the nine-month term that starts in October, with arguments likely in November or December, and a decision by June 2016. Meanwhile, the rule stays in place; PJM says it will include demand response in its upcoming auctions.
Read a summary of the development in Bloomberg here.
AEP-Ohio has teamed with KeyBank to offer streamlined financing for qualified energy-efficiency projects. There is no application fee, the loan term is flexible up to seven years, and AEP’s incentive can be applied to reduce the final loan amount.
Bricker & Eckler LLP, OMA’s counsel, keeps its finger on the pulse of investments in Ohio’s shale plays. It reports that investment in shale-related infrastructure continues to grow, despite the fluctuations in the prices of oil and gas.
More than $28 billion in projects have been announced since Bricker began tracking investments in October 2013. Investments have shifted to downstream infrastructure from exploration.
See the projects detailed here.
The Federal Energy Regulatory Commission (FERC) has been holding scoping hearings on the proposed Nexus interstate pipeline to transport natural gas liquids from Ohio’s Marcellus and Utica shale region.
The OMA weighed-in with supportive testimony. Appearing before the hearing in Wadsworth recently, OMA’s Ryan Augsburger told FERC representatives that, “The OMA has a long-standing position of support for a modernized energy infrastructure to maximize energy supplies and stabilize energy pricing and reliability.” The Nexus pipeline will support manufacturing in Ohio.
The House this week passed House Concurrent Resolution 9, which encourages the State of Ohio investment in thorium power. And, investment in liquid core molten salt reactors.
The resolution also calls for Ohio development of another element: Molybdenum-99.