News and Analysis
Members of the OMA Energy Committee met in Columbus this week. They discussed pending state legislation with Rep. Bob Cupp (R-Lima), Chair of the House Public Utilities Committee.
Lisa Decoteau, Director of Commodities Management Group, Constellation, presented on the transformative role of shale gas in the global hydrocarbons market and why it matters to Ohio manufacturers. 5/17/2018
Rep. Bob Cupp (R-Lima) (left) addresses the OMA energy committee. Committee chairman, Brad Belden, VP, Administrative Services, The Belden Brick Co., looks on.
Members of the Senate Public Utilities Committee this week unveiled a new version of House Bill 114, legislation to revise energy efficiency and renewable energy portfolio standards.
The new bill incorporates tracking requirements on qualified customers who may opt out of paying the energy-efficiency rider. The bill also contains provisions to relax overly restrictive siting policies governing the placement of commercial scale wind farms.
A vote was expected next week, but may not occur before the summer recess. Click to view a comparison of the Senate revisions. 5/17/2018
According to Bloomberg News this week, Trump administration officials continue to consider a bailout for the unprofitable, nuclear power plants owned by now bankrupt FirstEnergy Services. The source indicates that the administration is now considering using an obscure national defense law from the cold war that was created to help the steel industry to justify the possible action.
OMA members this week discussed possible legal appeals should the bailout be granted. Even though FirstEnergy no longer has an ownership stake in the power plants, the bankruptcy agreement between FirstEnergy and FirstEnergy Services provides a nice bonus to FirstEnergy if it successfully convinces officials in favor of a bailout. 5/17/2018
Oil & Gas Journal recently reported: “FERC granted Rover permission to place a segment of Phase 2, which included Mainline Compressor Station 3 in Crawford County, Ohio, and a section of the line between Mainline Compressor Station 2, in Wayne County, Ohio, and Mainline Compressor Station 3, in service for additional throughput. FERC’s approval allows for the full commercial operation capability of the Market Zone North Segment.
“Phase 1 of the project was also placed into service in segments, with the first portion going into service Aug. 31, 2017, and the remaining segment of Phase 1 going into service in December of 2017. Since December 2017, Rover has been capable of transporting up to 1.7 bcfd of natural gas.
“Rover will transport natural gas from the Marcellus and Utica shale production areas to markets across the US as well as into the Union Gas Dawn Storage Hub in Ontario.”
As a member of the Coalition for the Expansion of Pipeline Infrastructure (CEPI), a partnership of businesses, trade associations and labor groups that support the responsible expansion of critical energy infrastructure across Ohio and the region, OMA applauds this FERC action. 5/9/2018
In recent weeks, investors, analysts, policymakers, media and other stakeholders have been combing through the FirstEnergy Solutions (FES) bankruptcy settlement with creditors and former parent corporation, FirstEnergy (FE). One provision of interest allows FirstEnergy to participate in 50-50 sharing of federal or state bailout revenues.
An analysis by Bank of America Merrill Lynch states that: “This was framed as a way to reward FirstEnergy for any success with legislation and keep FirstEnergy management incentivized to remain involved in those efforts.”
Under that term sheet, FE has up to three years after the bankruptcy to exercise the warrant that entitles it to 50% of recoveries after FES’s unsecured creditors recover 60% of their claims.
Bottom line: FirstEnergy has a vested interest in federal or state bailouts and will continue lobbying federal and state officials for policies that will disrupt and distort a well-functioning market, even though it is no longer in the generation market. 5/3/2018
Last week the PUCO approved a settlement reached on a series of AEP rate cases. The OMA Energy Group was involved in settlement discussions and improved the cost impacts on the manufacturing sector. However, there were numerous moving parts including some provisions that will hike customer costs.
The settlement specifically confirms the OMA’s ability to challenge AEP’s new rider that customers must pay to bailout the unprofitable large coal power plants known as Ohio Valley Electric Corporation (OVEC).
OMA’s energy counsel, Kim Bojko of Carpenter Lipps & Leland, will explain the case impacts, as well as other PUCO cases of interest to manufacturers, at the May 16 meeting of the OMA Energy Committee. Register here.
Contact OMA’s Ryan Augsburger if you would like more information. 5/3/2018
Representatives from American Fine Sinter Company, Tiffin, with AEP Ohio leadership
Pictured with AEP Ohio leadership are Weastec, Inc. President Yasuhiko “Nick” Ida and Senior Manager Robert Moots. Weastec is in Hillsboro.
AEP Ohio recognized several power customers who have made outstanding contributions to increasing energy efficiency and environmental stewardship.
Abbott Nutrition, American Fine Sinter, General Mills, Glatfelter and Weastec were among the manufacturers awarded the AEP Energy Efficiency Champion Award this week.
Learn more about how your company can decrease energy usage, increase efficiency and save money. 4/26/2018
Free of the drag of its unprofitable generation business, FirstEnergy Solutions (FES), FirstEnergy reported a healthy profit of $1.2 billion for the first quarter.
John Funk of the Cleveland Plain Dealer reported that much of the profitability stems from an accounting gain related to the decision for subsidiary FirstEnergy Solutions file bankruptcy protection on March 31, the last day of the quarter.
Also, during the investor call, FirstEnergy’s CEO announced that a settlement between FES and its creditors had been reached which will release FirstEnergy from all claims. Here’s an analysis of the bankruptcy settlement prepared by Carpenter Lipps & Leland.
Meanwhile, FirstEnergy, FES, some coal interests, and community leaders in the footprint of the power plants continue to press federal and state officials about the need for a bailout. FES took steps late this week to certify its plans to close its Ohio nuclear power plants. In a letter to the Nuclear Regulatory Commission, FES Generation informed the agency that the Davis-Besse plant near Toledo will close on May 31, 2020 and the Perry plant in Lake County will close on May 31, 2021. 4/26/2018
At its annual meeting this week, Columbus-based American Electric Power (AEP) reported first-quarter 2018 corporate earnings of $454 million.
AEP’s Chairman and CEO Nick Akins used the occasion to announce plans to invest more than $17 billion in transmission and distribution upgrades. While AEP serves customers in many states, AEP’s Ohio customers have seen dramatic rises in both distribution and transmission portions of their bills without corresponding benefits.
Members of the OMA Energy Group will be monitoring case activity at the PUCO and FERC to ensure grid investments are necessary and produce customer benefits. Learn more about the work and benefits of the OMA Energy Group. 4/26/2018
FirstEnergy has used its PAC to promote Rep. Larry Householder in his bid for speaker vs. Rep. Ryan Smith.
A report by Cleveland.com illuminates how the utility’s PAC has invested in House candidates recruited by Householder: “In the first two months of 2018, the Akron-based power company’s political action committee donated more than $5,000 to the Perry County Republican and a total of about $149,000 to more than a dozen other House candidates, state campaign finance records show. Most, if not all, of the recipients have either backed Householder for speaker or are considered by many to be on his side, although some have not come out publicly in support of him.” 4/26/2018