Energy Management

DP&L Proposes New $1 Billion Rider

Dayton Power and Light (DP&L) has amended its Electric Security Plan application to the Public Utilities Commission (PUCO), proposing a $145 million per year “distribution modernization rider.”

The utility says that the rider is necessary to allow it to maintain its financial integrity and to access equity and debt capital in order to finance transmission and distribution infrastructure modernization investments.  DP&L also stated that the cash flow from the rider will be used to pay interest obligations on existing debt, make discretionary debt prepayments, and allow DP&L to make capital expenditures to maintain the company’s transmission and distribution infrastructure.

The Ohio Consumers’ Counsel estimates the newly requested rider would cost Dayton-area consumers $1.01 billion over seven years.

The OMA Energy Group is an intervenor in the case to protect manufacturers’ interests.  10/13/2016

Beer! Plant tour!

The OMA Energy Efficiency Peer Network (EEPN) has scheduled its next plant tour for Wednesday, November 2 at the Anheuser-Busch Brewery in Columbus, Ohio.

The tour will focus on energy efficiency and sustainability initiatives. Highlights will include brew kettle heat recovery; ammonia refrigeration efficiency; and compressed air pressure reduction.

Steel-toed shoes, hard hat, & safety glasses required. Limited hard hats and shoe covers available onsite.

Please register promptly as there are limited spaces remaining.  Register here.  10/11/2016

More Gas-Fired Electricity Generation Planned for Ohio

According to the Cadiz Times Recorder, EmberClear Corp. of Houston intends to build a gas-fired power plant near Cadiz in Harrison County. This would be the latest in a series of new gas-fired plants that seek to take advantage of plentiful shale gas.

The company plans a 1,000 megawatt plant on about 60 acres in the Harrison County Industrial Park. The project could provide for the electricity needs of about 1,000,000 houses.

It could take up to three years to obtain regulatory permits before a construction timeline would be developed.  The project would lead to a projected investment of $900 million and provide work for an estimated 500 construction workers and 30 permanent workers.  10/6/2016

DP&L Lobbying to Protect Utilities from Business Risk

Executives from Dayton Power & Light (DP&L) are lobbying state lawmakers for a legislative proposal that will be harmful for customers.  The utility wants the General Assembly to adopt legislation during the brief post-election lame duck session that would modify PUCO rate-making laws and provide more authority to the regulator.  In the package is authority to add new riders on customers’ electric bills if a utility’s fiscal integrity is threatened.

The legislative proposal would also allow utilities to charge customers “transition charges” outside the scope of law today, effectively reversing recent Supreme Court decisions that were favorable to customers.  Read more from OMA Energy Counsel, Carpenter Lipps & Leland.

It’s a stunning request of the General Assembly by a utility company.  The DP&L legislative proposal is similar to the PUCO proposal of FirstEnergy which asks for up to $8.9 billion in customer-paid subsidies due to its threatened fiscal integrity.  Both the FirstEnergy rate case and the DP&L legislative proposal seek to shift ordinary business risk from shareholders to ratepayers.

The OMA Energy Committee will cover this and many manufacturers’ energy issues at its meeting on November 17.  Members can register here.  9/29/2016

Energy Standards Legislation Heats Up

State-established electric utility energy efficiency and renewable energy standards were frozen by legislation in 2013.  The freeze is due to expire in early 2017.  Some lawmakers are eager to act on the issue during the upcoming lame duck legislative session.  This week, Governor Kasich renewed his intention to veto any bill that weakens or eliminates the standards.  Read more in the Cleveland Plain Dealer.

The governor was reacting to a plan recently updated by Senator Bill Seitz, Chair of the Senate Public Utilities Committee, that would end the freeze in December while softening the “standards” into “goals” and make other changes.  9/29/2016

AEP Ohio’s Incentive Auction Coming Soon – Get Your Cash

Manufacturers can bid for larger incentives for their efficiency projects in AEP Ohio’s upcoming Bid4Efficiency auction.  The auction provides a mechanism for manufacturers to earn efficiency incentives that are greater than AEP’s $25,000 maximum.

To receive incentives above the $25K cap, AEP Ohio’s Bid4Efficiency program offers a reverse auction where entities start at $0.08/kWh saved for incentives, and then bid down to the price at which they are willing to take an incentive.

An RFQ submittal is necessary to secure AEP pre-approval to participate in the auctions; RFQs are due by October 14, 2016.  The RFQ is short, requests only basic information, and can be completed in a short period of time.

Multiple auctions will be held between Nov. 7-11.  Auctions will be for different sized pots of money for both lighting and custom project kWh savings.  A customer may only win one auction.

OMA’s energy consultant is ready to help you navigate the process, assist with completing the RFQ, and can advise you on a bidding strategy. Contact John Seryak for further assistance as a benefit of your OMA membership.  9/27/2016

Crown Battery, Nissin Brake Recognized for Energy Efficiency Savings

New case studies of Ohio manufacturers Crown Battery and Nissin Brake by the Alliance for Industrial Efficiency highlight the potential of energy efficiency savings.  “My advice to other manufacturers? You need to take advantage of this,” said Matt Culbertson, energy engineer for Crown Battery.

According to the case studies, Crown Battery is saving $150,000-$210,000 annually, and engages plant workers by awarding “Save a Buck Dynasty” t-shirts to those with energy saving ideas.  Nissin Brake has saved a cumulative $3.4 million in energy costs since 2008.

Energy efficiency savings like these have the potential to add up to an eye-popping $298 billion for the U.S. manufacturing sector through 2030, according to a study simultaneously released by the Alliance.  The study investigated how manufacturing energy-efficiency can serve as a low-cost resource if carbon regulations come to fruition.  Ohio ranked 5th in terms of cumulative cost saving potential and 2nd in terms of emission reduction potential.  9/28/2016

Natural Gas Production Booming in Utica

The U.S. Energy Information Administration this week released new data on oil and gas production in the Utica shale play, indicating that energy developers are increasingly focused on natural gas.

It said:  “The rapid growth in Utica/Point Pleasant natural gas production since 2012 is attributable to increases in drilling efficiency, proximity to markets, improvements in business processes, resource targeting in stacked plays, and the lengthening of horizontal laterals. Relatively low oil prices and expansions in natural gas infrastructure make the natural gas-rich portions of the reservoir more desirable for development, and therefore, increasingly the target for operators.”

Monthly natural gas production from Utica wells increased from 0.1 billion cubic feet per day (Bcf/d) in December 2012 to more than 3.5 Bcf/d in June 2016. Oil production increased from 4,400 barrels per day (b/d) to nearly 76,000 b/d over the same period.  9/26/2016

AEP Sells Three Ohio Plants

AEP this week announced the sale of three of its Ohio plants, and one in Indiana.  The assets went for $2.2 billion.  The plants have a capacity of 5,200 megawatts.

The Ohio plants are the gas-fired Waterford Energy Center and Darby Generating Station and the coal-fired James M. Gavin Plant.  The purchasers are private equity firms Blackstone Group LP and ArcLight Capital Partners LLC.

AEP indicated it is focused on its regulated business, and not merchant power.  The company has several other merchant power plants in Ohio that were not included in the sale.  9/15/2016

FirstEnergy Should Not Get Something for Nothing

In a welcome development, the Cleveland Plain Dealer editorialized this week:  “FirstEnergy should not get something for nothing from its customers.”

The editorial notes the Ohio Consumers’ Counsel filing: “When all is said and done, [Ohio] consumers could be charged up to nearly $8.9 billion [over nearly eight years] to support the financial integrity of FirstEnergy Corp.”

The paper references a Bloomberg story that FirstEnergy “wants compensation of as much as $568 million (a year) for the added impact of salaries, vendor purchases and local employee spending in Akron.”  The company says that, if customers don’t pay that subsidy, Akron could lose its corporate headquarters.

The Plain Dearler:  “No one wants to see Akron lose a headquarters. But it’s not the responsibility of Ohio ratepayers to insulate FirstEnergy’s stockholders from the possibility that decisions made by FirstEnergy’s managers could invite a corporate takeover.”

Well said.  9/8/2016