Energy Management

Job Killing $29.4 Billion Subsidy?

Ohio utility proposals to “re-regulate” would cost Ohio electricity consumers $29.4 billion, the OMA Energy Committee was told this week.

Bill Siderewicz, President of Clean Energy Future, a developer of natural gas generation facilities, spoke with the committee about the costs of subsidizing Ohio utilities versus relying on the existing energy markets.   He said utility proposals would cost consumers $14.4 billion in subsidization of older coal units, and $15 billion for “mandatory construction of new gas-fired plants by inefficient utilities.”

He noted that low cost, abundant local natural gas has been the “spark plug” for the development of new independent power producer power generation in Ohio.  He counts 12 natural gas generation projects under development in the state with a whopping 10,836 MW of capacity.

He said that the Utica shale formation is currently sized at 3,192 trillion cubic feet.  “If every Ohio based mega watt of generation ran on Utica gas, we have a 2,660 year fuel supply,” according to Siderewicz.  11/17/2016

Some Corps. Want Reinstatement of Renewable Energy Requirements

John Rego, Partner, with OMA Connections Partner, Jones Day, summarizes the state of play with respect to the state’s two-year energy efficiency mandate freeze.

He says:  “With the end of the two-year freeze approaching, bills have been introduced in the Ohio General Assembly that would reduce or completely eliminate the renewable energy standards. … On October 25, 2016, nine companies, ranging from Whirlpool Corporation to Nestlé to Gap Inc., … urge(d) Ohio lawmakers to lift the freeze and restore the 2008 renewable standards. The companies argued that such standards, particularly energy efficiency mandates, would help them meet their corporate sustainability goals, while saving money and attracting clean energy producers to the state.”

And:  “For his part, Governor Kasich has vowed to veto any effort to extend the freeze or kill the renewable requirements entirely, although he has signaled a willingness to replace the 2008 standards with less stringent requirements. Since the 2008 standards will automatically be reinstated absent new legislation before the end of the year, Kasich seems to have a strong hand to play.”  11/10/2016

Duke Energy Can Collect that $19M After All

The Public Utilities Commission of Ohio last week reversed its prior decision thus permitting Duke Energy in Ohio to recover $19.75 million in “shared savings” incentives.

The commission granted Duke’s application for rehearing of its 2013 shared savings recovery case, overturning its previous ruling which held that Duke’s use of banked savings to claim a shared savings incentive was improper.

On May 20, 2015, the commission issued an order determining, among other things, that Duke may only use its banked savings to reach energy efficiency/demand reduction benchmarks.  Accordingly, Duke was not permitted to use banked savings to claim a shared savings incentive.  Last week’s action reverses this.  Duke will collect the $19.75M through an increase in the existing EE/PDR rider.  10/31/2016

PJM Visits with OMA Members

PJM Interconnection’s (PJM) Paul Sotkiewicz, Ph.D., Consulting Economist, recently presented PJM regional results, as well as the Ohio-specific results, of Clean Power Plan modeling the organization has executed.  Kerry Stroup, PJM’s Manager, State Government Policy, also participated.  

PJM is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity in all or parts of 13 states, including Ohio, and the District of Columbia.  As a neutral, independent party, PJM operates a competitive wholesale electricity market and manages the high-voltage electricity grid to ensure reliability for more than 61 million people.  11/01/2016

Pictured –  PJM’s Manager, State Government Policy Kerry Stroup, PJM’s Consulting Economist Paul Sotkiewicz, OMA president Eric Burkland, and VP, Administrative Services, The Belden Brick Co., Brad Belden

OMA Energy Efficiency Tour at Anheuser-Busch

OMA members who participate in OMA’s Energy Efficiency Peer Network (EEPN) took a plant tour this week, hosted by OMA member, Anheuser-Busch Companies, Columbus.  Multiple energy efficiency projects were showcased.

In addition to periodically touring plants, the EEPN gets together several times a year via web meeting to discuss a variety of energy efficiency technologies and case studies.  The group is facilitated by OMA’s consulting energy engineering partner, Go Sustainable Energy LLC.

Interested?  Sign up here.  There is no cost for OMA members and we’ll keep you posted about 2017 activities.  11/2/2016

$1.5 Billion Possibly at Stake in DP&L Case

Dayton Power and Light has requested that a new “Distribution Modernization Rider” (DMR) provide it $145 million per year for seven years in non-bypassable riders (the customer cannot “shop” around the rider cost).

If the DMR is grossed up for taxes as it was in the recent PUCO-approved FirstEnergy proceeding, and assuming a 35% corporate tax rate, the request increases to $223.1 million annually.  Multiplied by seven years, it would result in a total cost of $1.5 billion.

See how this proposed rider would affect manufacturers with varying electricity usage here.  10/27/2016

Energy Scenario Planning: Efficiency Investments Lower Costs

A recently released study shows investments in energy efficiency lower electricity costs better than do other scenarios modelled.  The study, “Four Paths to Ohio’s Energy Future,” was commissioned by Advanced Energy Economy.

The study looked at four scenarios for investment in Ohio energy systems, and projected costs for 2030.  A scenario heavy in energy efficiency investments lowers costs 1.71 cents/kWh from a base case without efficiency investments.  10/27/2016

$14.57 Billion, and Counting, in Above-Market Charges

In 1999, Ohio moved to allow customers to shop for electricity generation in order to establish the benefits of competition for the state and its economy.

Since that time, through various riders approved by the Public Utilities Commission of Ohio (PUCO), customers have paid $14.57 billion in above-market charges to the state’s utilities.  That is, $14.57 billion more than the costs customers paid for the actual electricity they bought from competitive suppliers.

The PUCO just approved another $1 billion in above-market charges for FirstEnergy.  Dayton Power and Light has proposed to the PUCO another $1.5 billion in charges.  That’d be a total of $16 billion if the DP&L proposal would be approved.

For manufacturers, these riders drain away precious cash that could be used for investment and innovation in Ohio, creating more jobs and more prosperity.  Join the OMA Energy Group to help stop this economic madness.  10/17/2016

How the $1 B FirstEnergy Approved Subsidy Impacts Manufacturers

Last week the Public Utilities Commission of Ohio approved a $1 billion subsidy of FirstEnergy by customers.  The ruling will cost customers $204 annually for, likely, five years.

Very large consumers of electricity look to see costs from the rider of $18 million, large users $1.9 million, and medium-sized consumers $140,000 over the period.

See a breakdown by usage here.  The OMA Energy Group opposed this costly subsidy, and will continue to litigate it, now that the PUCO has acted.  10/17/2016

PUCO OKs up to $1B in New Costs for FirstEnergy Customers

This week the Public Utilities Commission of Ohio (PUCO) approved a new “grid modernization” rider that amounts to an unwarranted subsidy for FirstEnergy that will stifle competition, drive electricity costs up and harm manufacturing competitiveness.

Eric Burkland, OMA president, issued a statement commenting on the PUCO decision to allow FirstEnergy to collect up to $1 billion in above-market customer charges:

“Today’s decision by the PUCO to give FirstEnergy a subsidy through a “grid modernization” rider is a setback for electricity consumers in Ohio. If implemented, the rider essentially will serve as another new tax, potentially costing families and businesses $1 billion, while also setting a precedent for the PUCO to grant above-market customer charges to the state’s other utilities to bolster utilities’ financials.

“These unwarranted new costs will put another strain on the budgets of families, particularly those least advantaged, and will harm the competitiveness of businesses, especially those that are energy intensive.

“What do these electricity customers get for the new costs? Pretty much nothing. The customers are being asked to pay FirstEnergy with no direct consumer benefits. The rider is called a “grid modernization rider,” but requires FirstEnergy to do nothing to actually modernize the grid.

“Customers are paying to prop up the finances of a failing company. FirstEnergy should address its own financial troubles by using methods manufacturers and other businesses are required to use – cut costs, sell assets, sell equity – rather than rely on a customer bailout.”  10/12/2016