News and Analysis
Nuclear Energy Bailout Bill Introduced
April 7, 2017Senator John Eklund (R-Chardon) this week introduced Senate Bill 128. The legislation imposes a new above-market charge on all customers in the FirstEnergy service territories. The revenue will be used to subsidize the two nuclear power plants operated by FirstEnergy’s subsidiary, FirstEnergy Solutions.
FirstEnergy Solutions is financially stressed, and potentially facing bankruptcy, the company has said. This bill is the latest in a series of attempts by the company to shore up its finances on the backs of its distribution customers.
The bill provides hundreds of millions per year for up to 16 years and can be increased by state regulators. Customers would not be able to “shop around” the charges.
The OMA opposes the bill. OMA president Eric Burkland issued a statement saying: “FirstEnergy should not be allowed to prop up its business on the backs of Ohio consumers. While manufacturers support nuclear power as part of an all-of-the-above energy portfolio, Senate Bill 128 is wolf in sheep’s clothing.” Read the full statement here. 4/6/2017
House Sends Clean Energy Rollback Bill to the Senate
April 7, 2017House Republicans overwhelmingly approved House Bill 114 last week by a vote of 65-31. The legislation weakens clean energy standards that were originally enacted in 2008. Similar legislation was approved late last session by the General Assembly but vetoed by Governor Kasich.
With 65 House votes, there is potential to override a possible gubernatorial veto. The bill now moves to the Senate. 4/6/2017
Natural Gas Infrastructure Expanded in Transportation Budget
April 7, 2017Last week the General Assembly completed work on the state transportation budget, House Bill 26. The legislation funds certain operations of the Ohio Department of Transportation (ODOT) and the Department of Public Safety and makes other law changes. Governor Kasich added his signature making the bill effective on March 31.
An amendment was added to increase the limit for a natural gas company infrastructure development rider to $1.50 per billing period, up from $2 per year. The rider can be used by a gas utility to cover costs of expanded gas infrastructure and is considered a useful economic development resource. 4/6/2017
More Power: Combined Heat & Power (CHP) Webinar is April 6
March 31, 2017Inside Ohio’s manufacturing community – and other businesses – lies the potential to generate 11,000 Megawatts of electrical power, enough to power the combined residential population of Ohio, Michigan, and Kentucky by using the waste heat from power generation to generate steam or hot water.
Combined heat and power (CHP) technology has the reliability of base load generation, is the most energy-efficient fuel-generation technology, has low emissions, and uses local natural gas.
The many benefits of CHP have led to a recent uptick in CHP development in Ohio, with much of the new power generation occurring at manufacturing facilities.
Learn more about CHP potential, how to determine if your facility is a good candidate for CHP, and what incentives are available to help finance CHP at your facility during a webinar, Thursday April 6, at 10:00 a.m.
DP&L and AEP Ohio will discuss their new CHP incentive programs and OMA’s energy consultant John Seryak will cover CHP benefits and potential barriers to implementation. The webinar is co-hosted by the OMA, the Ohio CHP Connection, and the Ohio Environmental Council.
Register here. There is no charge. Or contact John Seryak. 3/28/2017
OSU Study: Regulatory Charges Make Consumers Lose Money in Electricity Markets
March 24, 2017A recently released study from researchers at The Ohio State University shows that consumers have been the losers under the regulatory regime of the Public Utilities Commission of Ohio (PUCO) in recent years.
“(The years of transition to market pricing have) coincided with a natural gas boom and expansions in hydraulic fracturing utilization in Ohio. The resultant low natural gas prices have reduced the profitability of utility-owned generation, predominantly coal-fired plants. These changes have driven down generation costs.
“PUCO, however, has permitted through its Electric Security Plan approval process atypical increases in riders and surcharges on household electric bills that allow utilities to recover lost profits from their corporately-separated generation businesses. In essence, households in Ohio never saw the benefits of competition, but have instead been forced to subsidize the losses of an aging coal fleet through a system of inflated riders and surcharges on their home electricity bills,” finds the study.
This research reinforces the need for the state to reform the PUCO rate-making process, as called for by the OMA and the Office of the Ohio Consumers’ Counsel.
Read the full study here and its policy brief here. 3/17/2017
Deja Vu Bill on Clean Energy Standards
March 24, 2017Just months after Governor Kasich vetoed legislation that would have weakened existing clean energy standards, House Republicans have introduced a similar measure.
Together with 54 other co-sponsors, Rep. Bill Seitz (R-Cincinnati), Chairman of the House Public Utilities Committee, introduced House Bill 114. The bill revises and weakens enforcement of renewable energy standards and energy efficiency standards. With 55 co-sponsors, the bill has nearly enough co-sponsors to override a potential gubernatorial veto. The House will need to muster 60 votes to inoculate itself.
Three hearings on the bill have been held so far. This week testimony submitted by Ceres, a non-profit sustainability advocacy organization, made the case against the bill, saying: “Nestle, Whirlpool, Owens Corning and others-support clean energy standards because they help businesses cut energy costs, avoid the volatility of fossil fuel prices, and help companies stay competitive.” 3/23/2017
Settlement Improves Deal for DP&L Customers
March 24, 2017After months of negotiations DP&L reached a settlement with the PUCO staff and other parties in its electric security plan case (ESP III).
The Dayton utility last October had applied for a subsidy rider on customers’ bills of $145 million per year for eight years, totaling approximately $1.16 billion.
The settlement instead gives the utility a subsidy of $105 million for three years for a total of $315 million. The subsidy will be paid by a new rider on all customers’ bills in the DP&L service territory.
Carpenter Lipps & Leland (CLL), counsel for the OMA Energy Group, participated in the negotiations and secured this and other improvements.
The OMA Energy Group is a group of OMA members who have a voice in critical PUCO cases and legislation, help steer the OMA’s legal resources, and get first-hand updates and weekly members-only case summaries. Contact the OMA’s Ryan Augsburger to learn more. 3/23/2017
PUCO Launches “PowerForward”
March 17, 2017Public Utilities Commission of Ohio (PUCO) chairman Asim Haque has launched a new, and welcome, initiative termed “PowerForward.”
The agency announced: “PowerForward is the PUCO’s review of the latest in technological and regulatory innovation that could serve to enhance the consumer electricity experience. Through this series, we intend to chart a clear path forward for future grid modernization projects, innovative regulations and forward-thinking policies.
“Our hope is that the expertise of many stakeholders can help us better frame the grid of the future. We want to know what technologies or changes are needed, so that innovative regulations and forward-thinking policies can be developed.”
The initiative begins on April 18, 19 and 20 with a three-day “A Glimpse of the Future” series that will feature presentations examining technologies affecting a modern distribution grid; what the future grid could offer consumers; and what technologies are in development to realize such enhancements.
Ohio has been mired for years in a debate about old generating plants. This initiative gives the state an opportunity to have a conversation about developing and investing in new, innovative technologies.
The chairman has invited Ohio manufacturers to participate with their own stories and thoughts about new, or emerging, technologies. Contact OMA’s Ryan Augsburger, if you’d like to participate. 3/14/2017
Nuke Subsidies Threaten Markets
March 17, 2017The most recent State of the Market Report from Monitoring Analytics, PJM’s market monitor, says state mandated subsidies for nuclear power plants threaten the viability of competitive power markets.
The monitor states that subsidies “threaten the foundations of the PJM capacity market as well as the competitiveness of PJM markets overall.”
Subsidies “suppress incentives for investments in new, higher efficiency thermal plants but also suppress investment incentives for the next generation of energy supply technologies and energy efficiency technologies. These impacts are long lasting but difficult to quantify precisely,” writes the monitor.
Illinois and New York have created nuke subsidies. FirstEnergy is proposing a $300 million a year subsidy for its two old, uneconomic nuclear facilities. 3/14/2017
Ohio Electric Deregulation Saving Consumers $3 Billion a Year
March 10, 2017A recent whitepaper produced by OMA indicates that deregulation has dramatically lowered the generation rates offered to Ohio customers as cost-based ratemaking has been replaced by competitive market-based auctions.
Combined, shoppers and non-shoppers saved more than $16 billion from 2011 to 2015 due to Ohio’s move away from electric generation monopolies and to competitive markets.
There are additional documented benefits of deregulation including substantial investment in Ohio’s energy infrastructure. Eight new natural gas-powered plants are in various stages of construction throughout Ohio. Four more are in various planning stages.
Improvements in energy efficiency and reliability have been secured. Reserve margins of capacity are steadily in the 20 percent range, which is in excess of the 15 percent target established by PJM Interconnection, the grid manager.
Read the whitepaper, Competitive Markets for Electricity Deliver $3 Billion a Year in Savings to Ohio Electricity Consumers. 3/7/2017