News and Analysis
According to the Office of the Ohio Consumers’ Counsel, from 2000 to 2016, Ohio’s electric utilities collected $14.67 billion in above-market charges from all customers regardless whether the customers were purchasing generation supply from a competitive supplier. Most of these charges were approved by the Public Utilities Commission of Ohio (PUCO) to help the utilities manage through the transition from regulated pricing to market-based pricing.
Utilities continue to prevail in PUCO cases, however, resulting in new non-bypassable riders on customers to generate revenue needed to ameliorate the utilities’ (or their parent companies’) cash-flow problems and/or improve their profitability. In late 2016, the PUCO issued two rulings authorizing the collection of more than $1 billion of ratepayer money to prop up the corporate earnings of FirstEnergy and allowing an “unknown” amount for subsidies for unregulated AEP Ohio generation. In addition, Dayton Power & Light has a pending PUCO case that if approved would cost its customers another $625 million dollars over five years.
As consumers’ generation charges are dropping in the market as a result of electric generation deregulation, their non-generation charges, which in some cases include dozens of nonbypassable riders, are on the rise – eating away at customers’ overall savings with no corresponding benefits. These riders function as a new tax on families and businesses and are a drag on the state’s economy.
Read more in this recent OMA whitepaper: Ohio’s Electric Utilities’ Above-Market Charges Are Anti-Competitive For Ohio’s Consumers. 3/7/2017
This week, the OMA Energy Efficiency Peer Network (EEPN) toured a combined heat & power installation at Solvay Specialty Polymers USA, LLC in Marietta.
The EEPN schedules plant tours several times a year for members to see energy innovations.
If you’d be interested in joining the EEPN, just send an email to OMA’s Denise Locke, with your contact information.
Thank you, Solvay Specialty Polymers, for your generosity! 3/9/2017
This week OMA’s energy counsel, Kim Bojko, of Carpenter Lipps & Leland, argued before the Supreme Court of Ohio on behalf of the Appellants requesting that it overturn a Public Utilities of Ohio (PUCO) order that awarded Duke $55.5 million from customers for cleanup costs associated with two former manufactured gas plants that have not been in operation for 50-89 years.
Bojko stated that the PUCO improperly applied the ratemaking statutes in Ohio that do not permit recovery of expenses associated with plants that were not used and useful in rendering service to Duke’s distribution customers during the test year.
OMA and the Office of the Ohio Consumers’ Counsel, among others, appealed the PUCO decision three years ago. The court will render a decision in the near future.
On an investor call this week, FirstEnergy indicated that the company experienced a loss of $6.2 billion in 2016 on sales of $14.6 billion. CEO Chuck Jones discussed the possibility of bankruptcy for FirstEnergy Solution(FES), the generation-owning subsidiary of the company.
The company took a large write-down of its Ohio and Pennsylvania generating assets. FES is now valued at $1.6 billion. It’s total long-term debt is $3 billion.
The CEO said FirstEnergy aims to exit the generating business by 2018. It will sell or close the plants, he indicated.
Meanwhile, the company is seeking legislation that would provide very large customer-paid subsidies for its two Ohio nuclear plants. Obviously, such subsidy mandates would make the plants more valuable to a purchaser. Just as obviously, the subsidies would punish ratepayers with no benefit. 2/23/2017
There is a growing interest among Ohio manufacturers to better understand the benefits, feasibility and hurdles to combined heat and power applications (CHP).
The Solvay Specialty Polymers facility in Marietta features a new combined heat and power plant. The tour is hosted by Solvay, Varo Engineers and DTE Energy Services.
Limited to 30 registrants; must be a manufacturing member of OMA to participate.
See the event and registration details here. 2/20/2017
Dayton Power & Light (DP&L) is litigating a proposal at the Public Utilities Commission of Ohio (PUCO) that, if approved, will allow it to impose more above-market charges on customers in its service area. The estimated cost of the rider is $625 million over five years. The rider will not be by-passable by shopping with a competitive supplier.
DP&L intends to use the $625 million to reduce its debt and allegedly invest in its grid; however, this is too large of a subsidy to bailout DP&L’s parent, DPL Inc., and the holding company, AES. There are also many other proposed above-market charges embedded in the proposal that will cost customers even more money during the term of the proposal.
The OMA Energy Group is opposing the measure. OMA members can take action by making a phone call to or arranging a meeting with elected officials to express opposition to this proposal. Contact Governor Kasich (contact information) and your state senator and state representative (look up here).
Here is a sample letter (in Word) for communicating with elected officials. 2/14/2017
Late this week Governor Kasich announced the following appointments to the Public Utilities Commission of Ohio:
Lawrence R. Friedeman of Waterville (Lucas Co.) will replace M. Howard Petricoff. Friedeman received his bachelor’s degree and juris doctorate from University of Pittsburgh. He is currently Vice President of Regulatory Affairs and Compliance at IGS Energy.
Daniel R. Conway of Upper Arlington (Franklin Co.) replaces Lynn Slaby, whose term is expiring. Conway received his bachelor’s degree from Miami University and his juris doctorate from the University of Michigan. He is currently an attorney at Porter, Wright, Morris and Arthur LLP and is an adjunct professor at The Ohio State University Law School. 2/16/2017
A recent poll of Ohioans found support for the benefits of a deregulated energy marketplace. The Fallon Research firm was engaged by the Alliance for Energy Choice to measure Ohioans’ attitudes and opinions about energy policies.
- 91.5% oppose changing Ohio law to allow utilities, like AEP and First Energy, to charge customers for the cost to build their new plants.
- 78.7% oppose a change in law that would eliminate the ability to shop for the best price for electric and natural gas service from a variety of providers and require customers to take services only from their local utility.
- 62% disagree that utility customers should pay the additional cost to support uneconomical power plants because it may preserve jobs in certain communities.
- 55.5% agree that Ohio should increase electric market competition, even if it means the elimination of the government-mandated electric utility monopoly that has existed for decades.
Here are all the results. 2/6/2017
Last week, the Federal Energy Regulatory Commission (FERC) issued a certificate of public convenience and necessity for the Rover Pipeline project. The Coalition for the Expansion of Pipeline Infrastructure (CEPI), of which OMA is a member, applauded FERC for releasing the certificate after two years of thorough review.
Once in operation, the Rover Pipeline will fill a critical need of natural gas producers in the Marcellus shale region. While production levels have steadily risen in recent years thanks to new extraction technologies, the ability to transport those resources to end markets has been lacking. Now, with the Rover Pipeline clearing a major regulatory hurdle, natural gas producers in Ohio, Pennsylvania, and West Virginia are one step closer to meeting demand for affordable, domestically-produced natural gas. 2/6/2017
Just a month after stepping down as a member of the Public Utilities Commission of Ohio (PUCO) amid pressure from Senate Republicans, M. Howard Petricoff has been hired in a top staff job at the PUCO.
As chief analyst of the PUCO, Petricoff will be in a key position to help the state agency balance the needs of customers with those of regulated public utilities in accordance with Ohio law.
Congratulations to Mr. Petricoff! 2/2/2017