News and Analysis
Attorneys for the University of Cincinnati have filed an application with the PUCO to secure a discount on their power bills. If approved, other customers in the Duke service territory would pay more on their electric bills to subsidize the university.
These type of arrangements are rare and have customarily been reserved for trade-exposed businesses, not public education institutions.
The OMA Energy Group has taken issue with the application and filed comment. OMA wrote: “UC does not promise to add to or even to maintain its current employment levels and it does not promise any capital investment. Further, UC has not demonstrated that it exports goods out of state, which is a key criterion to determine whether a business or organization’s operations benefit the state by increasing the state of Ohio’s Gross State Product.”
Read more in Gongwer News. 8/16/2018
The upcoming OMA Energy Committee is on Wednesday, August 15 from 10:00 a.m. until 1:00 p.m. The meeting will be held at the world’s leading glass container manufacturer, Owens-Illinois, Inc. (O-I), at its corporate campus in Perrysburg. Lunch is included courtesy of our host, O-I.
An optional tour of the O-I Innovation Center is offered prior to the meeting at 8:30 a.m. A tour of the Oregon Clean Energy Center (Oregon, OH) will follow the meeting at 2:00 p.m. for interested members.
Agenda topics include:
- Analysis of the state and federal proposals to subsidize nuclear and some coal power plants — what do they mean for you?
- Impact to manufacturers of FERC rulings on PJM proposals
- Natural gas and electricity pricing trend reports
- A special report on wind energy and a guest presentation from One Energy
- Our popular counsel’s report, engineering report and public policy report for need-to-know information
Register here or call (800) 662-4463. Registration is required. 8/8/2018
The Ohio electric utility companies and/or their parent companies have a goal to obtain a bailout for an uneconomic coal power plant known as OVEC (Ohio Valley Electric Corporation). The bailout would be financed by electric customers.
Akron-based FirstEnergy’s ownership share of OVEC was transferred to its now-bankrupt affiliate company, FirstEnergy Solutions (FES). This week the federal judge handling the bankruptcy case granted FES’s request to be exempted from OVEC operating liabilities meaning remaining OVEC owners, including AEP, will now shoulder additional liability.
Ohio’s residential customer advocate, the Office of the Ohio Consumers’ Counsel, urged the court to deny FES’s request to be excused from the contract on the grounds that electric customers could end up paying more.
If the Ohio operating companies that are OVEC owners are forced to make up the difference for FES’s share of the OVEC operating costs, Ohio consumers could pay more as the PUCO has currently granted AEP authority to recover its net OVEC operating costs from its Ohio customers. Similar cost recovery approval has been requested and is pending before the PUCO for Duke and DP&L.
The OMA has been the leading business advocate opposing OVEC bailouts. 8/2/2018
Ohio electric customers in the FirstEnergy service territory have been paying a new subsidy to FirstEnergy since January 1, 2017.
The OMA Energy Group opposed the new customer surcharge during proceedings at the PUCO; however, the state agency authorized FirstEnergy to collect $132.5 million (plus taxes) annually over three years from customers through a distribution modernization rider (DMR) with virtually no strings attached on for how it must be spent. With taxes, FirstEnergy is currently collecting $168 million annually from customers.
This week, together with the Ohio Consumers’ Counsel, the OMA Energy Group asked the court to halt collecting the money from customers until the appeal is complete.
“We believe this new rider is an unlawful generation subsidy meant to prop up the bankrupt FirstEnergy Solutions corporate parent and are appealing it the Ohio Supreme Court,” commented the OMA’s Ryan Augsburger.
Furthermore, “despite the name of the new rider, the charge does not require the FirstEnergy utilities to spend a penny of the money on distribution service or modernization. Instead, the charge makes Ohio customers pay for credit support regarding the FirstEnergy utilities’ parent company, FirstEnergy Corp,” the OMA said in its joint motion for a stay. 8/2/2018
This week the OMA continued its opposition to a FirstEnergy customer rider, “distribution modernization rider or DMR,” by asking the Supreme Court of Ohio to stop the collection of the charge from customers during the pendency of its appeal.
In approving the DMR in 2016 over strong customer opposition, the PUCO awarded FirstEnergy a $132.5 million (plus taxes) customer-paid annual windfall with virtually no strings attached on how it must be spent. With taxes, FirstEnergy is currently collecting $168 million annually from customers.
The PUCO in December responded to a request from the Office of the Ohio Consumers’ Counsel (OCC), the state’s residential consumer advocate, to investigate where the money is going by opening a case.
According to an article in Energy News Network, through the opened investigation, OCC has been attempting to gain information from FirstEnergy about how the rider proceeds are being spent. FirstEnergy has refused to comply with OCC’s discovery requests.
What makes it particularly onerous for business and residential customers to pay the rider is that it was awarded to prop up FirstEnergy’s underwater generation affiliate company, FirstEnergy Solutions (FES). Now that FES is bankrupt the justification by the PUCO to boost the company’s credit becomes even weaker. 8/2/2018
The Ohio Department of Natural Resources (ODNR) recently released its summary of 2018 Q1 natural gas and oil production.
According to ODNR, “During the first quarter of 2018, Ohio’s horizontal shale wells produced 3,942,251 barrels of oil and 531,291,017 Mcf (531 billion cubic feet) of natural gas” and “natural gas production from the first quarter of 2018 showed an 42.85% increase over the first quarter of 2017, while oil production decreased by 3.6% for the same period.”
E&E News reported that energy analyst Taylor Robinson describes the economic potential of the vast amount of “wet” natural gas in the shale rocks of Appalachia’s Ohio River region as “Rich, rich, rich, rich.” 7/26/2018
A new report by the Brattle Group, an economic analysis consultancy, looked at the U.S. Department of Energy’s (DOE) proposal to require customers to prop up uneconomic coal and nuclear power plants. It found that customers could be forced to subsidize the money-losing power plants to the tune of $34 billion, or higher.
According to the report, the DOE bailout order could cost customers as much as $70 billion “if power plant owners were also granted a return on their invested capital in addition to payments for operating shortfalls.”
The report was commissioned by industry associations including American Petroleum Institute (API), Advanced Energy Economy (AEE), American Wind Energy Association (AWEA), Electricity Consumers Resource Council (ELCON), Electric Power Supply Association (EPSA), and Natural Gas Supply Association (NGSA).
The OMA has been a steadfast opponent of state and federal bailouts for uneconomic power plants.
Members of the OMA Energy Group will be able to access custom cost impact assessments as more data become available.
All members are invited to attend the OMA Energy Committee meeting on August 15 at Owens-Illinois, Inc. in Perrysburg, Ohio. Register here. 7/26/2018
Due to member request for more regional meetings, the upcoming meeting of the OMA Energy Committee will be held in Perrysburg on Wednesday, August 15 from 10:00 a.m. until 1:00 p.m.
This special regional meeting will be held at glass manufacturer Owens-Illinois, Inc. (O-I) at its corporate campus.
Lunch is included courtesy of our host, O-I, and a tour will be offered. (Tours require closed-toe shoes (no high heels) and long pants. Safety glasses and ear protection will be provided.)
Topics on the agenda include a special report on wind energy, analysis of state and federal generation plant subsidy proposals, legislative updates, gas and electric pricing trends, and more.
All members are welcome. Please register here or call (800) 662-4463. Registration is required. 7/19/2018
After months of anticipation, the Senate declined to act on House Bill 114, legislation to revise Ohio’s energy standards for renewable energy and energy efficiency.
The bill was amended earlier in the spring by the Senate Energy and Natural Resources Committee to relax Ohio’s restrictive wind farm siting requirements.
Committee Chairman Troy Balderson (R-Zanesville) told statehouse reporters that further amendments need some refinement, but that “this bill is not dead. It’s just not ready for passage out (of committee) today.”
The Senate is now on summer recess and is not expected to be back in session much until after the November election. 7/12/2018
FirstEnergy Solutions (FES) filed a motion to approve bidding procedures – and the ultimate sale – of its retail business.
FES has entered into an asset purchase agreement with Exelon Generation Company, LLC. (Exelon), which is an affiliate of Constellation Energy. The purchase relates to FES’ retail business and includes primarily the purchase of customer contracts that FES has with various customers either directly or through brokers and aggregation programs. The agreement is not for the purchase of FES’ generating plants.
OMA’s energy counsel Kim Bojko of Carpenter Lipps & Leland describes the bidding process in this memo to the OMA Energy Group. She addresses considerations for manufacturers who may presently be in contract with FES for power supply. 7/12/2018