News and Analysis
From this month’s OMA Energy Guide INSIGHTS regarding the recently announced bankruptcy of First Energy Solutions (FES):
“No one would have predicted a few years ago that the very same company fighting our policy makers for the opportunity to live or die by the market through electric deregulation would be the same company succumbing to Chapter 11 bankruptcy restructuring, mainly due to the effects of an open market.
“The company which once had the largest market share of electric-shopping customers in Ohio has been lobbying everyone, even President Trump, for a life preserver to keep its high-cost power plants operating.
“When one hears about a perceived utility going bankrupt most immediately think “Get out the candles, honey, the power is going out” but what are the real impacts of this bankruptcy on Ohio’s people, policy and the price we pay for power?”
This week, the U.S. Department of Energy (DOE) and the National Association of Manufacturers (NAM) announced the Sustainability in Manufacturing Partnership. Through this partnership fostered by DOE’s Better Plants program, DOE and the NAM will work together to help U.S. manufacturers drive energy productivity improvements and accelerate adoption of energy efficient technologies.
The Sustainability in Manufacturing Partnership will provide DOE and the NAM opportunities to engage directly with manufacturers, identify energy efficiency improvements, and recognize companies and leaders that have led the way in innovative strategies. 4/10/2018
The FirstEnergy affiliate companies that own and operate power generation, that is, FirstEnergy Solutions (FES), as well as its subsidiaries and FirstEnergy Nuclear Operating Company (FENOC), filed for Chapter 11 bankruptcy protection over the holiday weekend.
Days earlier the company had publicly announced its intent to shutter unprofitable power plants, most notably its nuclear power plants, two of which are in Ohio.
Officials of the regional grid operator PJM Interconnection, as well as the PUCO, said that in spite of the announced power plant shutdowns, this is not an issue of reliability and that there is no immediate emergency because the market is working to provide more than adequate reserves and to promote fuel diversity.
In its announcements, FES, like its parent company previously, said it will continue to seek legislative and regulatory relief at the state and federal level. In that vein, FirstEnergy supporters have reportedly been meeting with top federal government officials to push for an emergency order to compensate certain FES-owned power plants at customer expense. PJM refuted the justification advanced by FES in this letter to Department of Energy Secretary Rick Perry.
In the last 45 days, two congressional joint letters signed by 23 members of Congress and three U.S. Senators have urged the president to subsidize the FES power plants. Most of Ohio’s Congressional delegation are among the signatories.
Concerned members can contact their member of Congress and ask them to reconsider their support for bailouts. 4/5/2018
On March 31, 2018, FirstEnergy Solutions (FES) filed for bankruptcy. While the company has stated it will continue to serve customers, OMA members taking generation supply service from FES may wonder how this affects them and if they have alternative options.
OMA has made arrangements with its energy supply partner, Scioto Energy, to help members review their FES agreements and analyze if it is economically better to ride out the FES agreement or to go with a lower rate from a different supplier.
If the economics indicate savings by moving to another supplier, Scioto Energy will assist with transition details.
The process produces quick information so members can then develop a strategy to mitigate risk and maximize savings.
If interested, contact Susanne Buckley, Managing Partner, Scioto Energy, via email or by phone at (614) 888-8805, ext. 104.
If you have questions about any of this, please email OMA’s Ryan Augsburger. 4/5/2018
This week, FirstEnergy’s subsidiary company that operates nuclear and coal power plants, FirstEnergy Solutions, announced its intent to shut down its two nuclear power plants in Ohio and one in Pennsylvania in 2021.
In a press release the company called on elected officials in Ohio and in Pennsylvania “to consider public policy solutions that would recognize the importance of these facilities to the employees and local economies in which they operate, and the unique role they play in providing reliable, zero-emission electric power for consumers in both states. We stand ready to roll up our sleeves and work with policy makers to find solutions that will make it feasible to continue to operate these plants in the future.”
The subsidiary also wrote to U.S. Secretary of Energy Rick Perry asking the agency to order PJM, the regional grid operator, to provide additional compensation to their (only) power plants.
The subsidiary is expected to file for bankruptcy in the coming days to seek protection from creditors before an expected payment default in early April. 3/29/2018
The OMA and the National Federation of Independent Business/Ohio (NFIB/Ohio) today responded to the announced closure of three nuclear power plants by FirstEnergy Solutions (FES).
Earlier this week, FES announced it intends to deactivate three nuclear power plants over the next three years — Davis-Besse Nuclear Power Station and Perry Nuclear Power Plant in Ohio, and Beaver Valley Power Station in Pennsylvania.
FES has been unsuccessful in convincing Ohio lawmakers to approve a customer-funded bailout for the financially failing plants.
OMA President Eric Burkland said in the joint press statement: “We take no joy in First Energy Solutions’ recent announcement, but make no mistake — it is not the inaction of Ohio policymakers that led to this. Ohio decided nearly 20 years ago to move to a competitive energy market. Many generation companies have successfully adapted and continue to thrive. And Ohio energy customers are, without question, coming out ahead.”
OMA and NFIB/Ohio, along with other pro-consumer groups are advocating for energy policy that protects Ohio consumers from unfair rate hikes. House Bill 247 sponsored by Rep. Mark Romanchuk is one such bill currently being debated in the General Assembly. 3/29/2018
In this recent press release, the U.S. Energy Information Agency (EIA) said that “overall electricity use in US manufacturing has declined in recent years, based on data from the US Census Bureau.”
The release stated that “many manufacturing establishments have the option of generating their own electricity in addition to pulling directly from the electric grid to run their processes,” and that “most operators get their electricity from grid purchases.”
According to the EIA, “From 2006 through 2016, the manufacturing sector purchased 87% to 89% of their electricity from the grid and generated the remaining 11% to 13% onsite.” 3/29/2018
To help OMA members network, learn and share about sustainability goals, practices and projects, the OMA created the Sustainability Peer Network (SPN).
The next SPN event is co-hosted by The J.M. Smucker Company and SmithFoods in Orrville, OH on Wednesday, April 18.
SmithFoods’ natural gas fleet fueling station and Smucker’s Grind2Energy food waste recycling system and its green-designed R&D building will be showcased.
The Public Utilities Commission of Ohio (PUCO) held its PowerForward program this week to hear presentations about ratemaking and regulation.
Previous hearings have probed emerging and available technology to drive grid modernization, but this week questions like who should pay and how should investments be structured were examined.
This week also focused on regulatory considerations affecting electric vehicles and featured insights from Britta Gross, Director Advanced Vehicle Commercialization Policy, General Motors. 3/8/2018
OMA members at this week’s OMA Energy Committee decried the actions of Ohio electric utilities that have announced they intend to keep federal tax reform savings rather than passing them on to customers. Monopoly electric distribution utility companies in most states have acted voluntarily to pass the tax savings on to customers.
The Public Utilities Commission of Ohio (PUCO) has opened an investigation into the propriety of Ohio’s utilities passing tax savings along to customers, but Ohio’s investor-owned electric distribution utilities (AEP-Ohio, Duke Energy, FirstEnergy, and Dayton Power & Light) are challenging this PUCO directive.
The OMA Energy Group has intervened to support immediate rate reductions stemming from the tax savings.
Here’s an analysis of the actions taken by other states by OMA energy counsel, Kim Bojko of Carpenter Lipps & Leland, in a memo to the OMA Energy Group.
Cleveland Plain Dealer energy reporter John Funk reports that FirstEnergy says a major reduction in the company’s overall delivery rates or a refund of money to customers to reflect the new 21 percent federal tax rate is out of the question. 3/1/2018