News and Analysis
On March 31, 2018, FirstEnergy Solutions (FES) filed for bankruptcy. While the company has stated it will continue to serve customers, OMA members taking generation supply service from FES may wonder how this affects them and if they have alternative options.
OMA has made arrangements with its energy supply partner, Scioto Energy, to help members review their FES agreements and analyze if it is economically better to ride out the FES agreement or to go with a lower rate from a different supplier.
If the economics indicate savings by moving to another supplier, Scioto Energy will assist with transition details.
The process produces quick information so members can then develop a strategy to mitigate risk and maximize savings.
If interested, contact Susanne Buckley, Managing Partner, Scioto Energy, via email or by phone at (614) 888-8805, ext. 104.
If you have questions about any of this, please email OMA’s Ryan Augsburger. 4/5/2018
This week, FirstEnergy’s subsidiary company that operates nuclear and coal power plants, FirstEnergy Solutions, announced its intent to shut down its two nuclear power plants in Ohio and one in Pennsylvania in 2021.
In a press release the company called on elected officials in Ohio and in Pennsylvania “to consider public policy solutions that would recognize the importance of these facilities to the employees and local economies in which they operate, and the unique role they play in providing reliable, zero-emission electric power for consumers in both states. We stand ready to roll up our sleeves and work with policy makers to find solutions that will make it feasible to continue to operate these plants in the future.”
The subsidiary also wrote to U.S. Secretary of Energy Rick Perry asking the agency to order PJM, the regional grid operator, to provide additional compensation to their (only) power plants.
The subsidiary is expected to file for bankruptcy in the coming days to seek protection from creditors before an expected payment default in early April. 3/29/2018
The OMA and the National Federation of Independent Business/Ohio (NFIB/Ohio) today responded to the announced closure of three nuclear power plants by FirstEnergy Solutions (FES).
Earlier this week, FES announced it intends to deactivate three nuclear power plants over the next three years — Davis-Besse Nuclear Power Station and Perry Nuclear Power Plant in Ohio, and Beaver Valley Power Station in Pennsylvania.
FES has been unsuccessful in convincing Ohio lawmakers to approve a customer-funded bailout for the financially failing plants.
OMA President Eric Burkland said in the joint press statement: “We take no joy in First Energy Solutions’ recent announcement, but make no mistake — it is not the inaction of Ohio policymakers that led to this. Ohio decided nearly 20 years ago to move to a competitive energy market. Many generation companies have successfully adapted and continue to thrive. And Ohio energy customers are, without question, coming out ahead.”
OMA and NFIB/Ohio, along with other pro-consumer groups are advocating for energy policy that protects Ohio consumers from unfair rate hikes. House Bill 247 sponsored by Rep. Mark Romanchuk is one such bill currently being debated in the General Assembly. 3/29/2018
In this recent press release, the U.S. Energy Information Agency (EIA) said that “overall electricity use in US manufacturing has declined in recent years, based on data from the US Census Bureau.”
The release stated that “many manufacturing establishments have the option of generating their own electricity in addition to pulling directly from the electric grid to run their processes,” and that “most operators get their electricity from grid purchases.”
According to the EIA, “From 2006 through 2016, the manufacturing sector purchased 87% to 89% of their electricity from the grid and generated the remaining 11% to 13% onsite.” 3/29/2018
To help OMA members network, learn and share about sustainability goals, practices and projects, the OMA created the Sustainability Peer Network (SPN).
The next SPN event is co-hosted by The J.M. Smucker Company and SmithFoods in Orrville, OH on Wednesday, April 18.
SmithFoods’ natural gas fleet fueling station and Smucker’s Grind2Energy food waste recycling system and its green-designed R&D building will be showcased.
The Public Utilities Commission of Ohio (PUCO) held its PowerForward program this week to hear presentations about ratemaking and regulation.
Previous hearings have probed emerging and available technology to drive grid modernization, but this week questions like who should pay and how should investments be structured were examined.
This week also focused on regulatory considerations affecting electric vehicles and featured insights from Britta Gross, Director Advanced Vehicle Commercialization Policy, General Motors. 3/8/2018
OMA members at this week’s OMA Energy Committee decried the actions of Ohio electric utilities that have announced they intend to keep federal tax reform savings rather than passing them on to customers. Monopoly electric distribution utility companies in most states have acted voluntarily to pass the tax savings on to customers.
The Public Utilities Commission of Ohio (PUCO) has opened an investigation into the propriety of Ohio’s utilities passing tax savings along to customers, but Ohio’s investor-owned electric distribution utilities (AEP-Ohio, Duke Energy, FirstEnergy, and Dayton Power & Light) are challenging this PUCO directive.
The OMA Energy Group has intervened to support immediate rate reductions stemming from the tax savings.
Here’s an analysis of the actions taken by other states by OMA energy counsel, Kim Bojko of Carpenter Lipps & Leland, in a memo to the OMA Energy Group.
Cleveland Plain Dealer energy reporter John Funk reports that FirstEnergy says a major reduction in the company’s overall delivery rates or a refund of money to customers to reflect the new 21 percent federal tax rate is out of the question. 3/1/2018
At its quarterly meeting this week, the OMA Energy Committee heard gas and electricity energy market forecasts.
This from Speaker Paul Ryan’s office this week: Recently enacted federal tax reform is resulting in electricity rate reductions in 39 states, but not in Ohio.
Contact your state legislators to ask why.
Read more here. 2/22/2018
During FirstEnergy’s investor call this week, FirstEnergy’s CEO Chuck Jones predicted an imminent bankruptcy of affiliate FirstEnergy Solutions (FES). He also expressed disappointment that state and federal officials have not provided customer-funded subsidies to prop up the company that owns several unprofitable nuclear and coal power plants.
Respected energy industry trade press, RTO Insider reported that Jones remarked that FE has cut ties with FES and that he expects the subsidiary will not survive the winter.
The article quotes Jones as saying, “I’m personally disappointed that the endeavors haven’t resulted in a meaningful legislative or regulatory support, given the importance of these plants to grid resiliency, reliable and affordable power and the region’s economy.” 2/22/2018