News and Analysis
FirstEnergy to Exit Competitive Generation, but Asks General Assembly for Nuclear Power Plant SupportJanuary 26, 2018
In the same week that FirstEnergy announced an investor group would provide $2.5 billion to enable the company to offload unprofitable generation liabilities, the Akron-based utility appeared in a Statehouse hearing room to urge lawmakers to pass Senate Bill 128 to require Ohio customers to bailout unprofitable nuclear power plants.
Sam Belcher, Chief Nuclear Officer, FirstEnergy, said in testimony: “The updates to the legislation offered by Senator Eklund in October balance the costs to customers of creating a clean energy jobs program with the benefits received from keeping Ohio’s nuclear plants operating. The legislation is expected to generate approximately $180 million annually. While this is less than the original legislation and does not provide the same long-term certainty, it increases the likelihood of keeping Davis-Besse and Perry operational throughout the life of the program.”
Mark Stahl, an Ottawa County Commissioner, also attended the hearing to testify for the bailouts in the name of fuel diversity.
The OMA opposes efforts that shift utility business risk from investors to customers. 1/25/2018
The OMA and a member company this week urged the House Public Utilities Commission to reform electric utility laws that are taking billions of dollars out of consumer pocketbooks.
OMA energy counsel Kim Bojko debunked various claims that utilities have made to the committee over previous hearings on HB 247 (Romanchuk, R-Mansfield). She testified: “HB 247 furthers many of the original objectives of the deregulation bill passed in 1999. It promotes competitive electric markets and ensures effective competition by avoiding anticompetitive subsidies …10 years later, the market has developed and competition is working and saving customers billions of dollars. … it is time to move forward and allow the markets to work without government intervention and without above-market charges imposed by regulated utilities.”
Geoff Korff, President, Quaker City Castings, urged the committee to support the bill, saying that current law “allowed for utilities to seek and obtain approval for a whole host of above market, non-bypassable charges on customer bills. These charges are disrupting customers’ ability to save money by shopping their electric loads. My own company has seen its distribution rates increase by 34% in the past three years while my generation rates have come down.
“Passing HB 247 will improve the state’s competitiveness by allowing customers to take advantage of the innovative offerings the competitive market is developing without being encumbered by various non-bypassable charges that do little to nothing to benefit customers.” 1/18/2018
Revised net metering rules were adopted by the Public Utilities Commission of Ohio (PUCO) in its November 8, 2017 order. On January 10, 2018, the PUCO heard oral arguments from interested parties regarding the rules.
Issues of interest to manufacturers that were raised include: 1) the form and amount of compensation available to net metering customers for excess generation; 2) the availability of net metering tariffs to shopping customers, and; 3) the rules governing which facilities qualify for net metering.
Here is a good summary of the arguments from Kim Bojko of Carpenter Lipps & Leland, OMA’s energy counsel.
The PUCO will take the oral arguments into consideration when rendering its decision adopting final net metering rules. 1/18/2018
The Republican polling firm, Public Opinion Strategies, last month fielded a survey of Ohio voters who identify as Republican or as conservative independents regarding energy policies in the state.
According to a memo from Public Opinion Strategies: “The survey results show that conservative voters throughout the state overwhelmingly support policies that encourage greater production of renewable energy and increasing energy efficiency, including a renewable energy standard and revising wind set-back rules to better accommodate turbine siting. Moreover, they reject surcharges to shore up existing coal and nuclear power, and attempts to erode consumer options among electricity providers. Overall, seven-in-ten conservative voters would advise GOP candidates in the state to support those policies, and say that if it were up to them fully half of the state’s electricity would come from renewable energy.”
Read more about the poll results here. 1/18/2018
This week the Federal Energy Regulatory Commission (FERC) issued an order to terminate its proposed rulemaking that was submitted by the Secretary of the Department of Energy that would have used consumer-paid subsidies to prop up uneconomical coal and nuclear generators in the name of grid reliability and resiliency.
OMA Energy Group (OMAEG), among other customer groups, twice submitted comments to FERC opposing the proposed rule.
In this summary of the FERC’s decision, OMA energy counsel Kim Bojko of Carpenter Lipps & Leland wrote: “… FERC concluded that although the goal of grid reliability and resiliency is a worthy one, the record in this case simply does not support the existence of a reliability or resiliency problem. And even if it had, the Proposed Rule did not put forth a solution that would actually solve that problem.”
And, “FERC’s Order … will benefit … consumers by not implementing a rule that would force consumers to fund a bailout to certain, select generators that can no longer compete in the market. The Order defined resiliency and set forth a process to explore … whether a problem even exists. The Order also appears to be stating that if a problem does in fact exist, FERC will look for market solutions on a regional basis.” 1/11/2018
The OMA told members of the Senate Public Utilities Committee this week that manufacturers oppose bailouts of unprofitable power plants.
Testifying on behalf of the OMA, OMA energy counsel Kim Bojko of Carpenter Lipps & Leland expressed opposition to the most recent version of Senate Bill 155, which would provide a subsidy to maintain uneconomic power plants owned by the Ohio Valley Electric Corp. (OVEC), including a plant in Indiana.
Bojko reminded lawmakers that the bill is a departure from the pro-market policies of the state regarding electric generation and competitive retail electric service.
Ohio State University economist Edward “Ned” Hill also presented opponent testimony. Dr. Hill said, ” What the committee has before it is another attempt to subsidize uneconomic legacy electric generation resources owned by Ohio’s Investor-Owned Utilities (IOUs).” 1/11/2018
Members of the PUCO this week voted unanimously to approve an electricity discount for several newly sited Amazon data centers (Vadata). The discount is made possible by exempting Amazon’s affiliate from certain distribution charges which has the effect of shifting costs to other customers, according to statements in the Columbus Dispatch and Columbus Business First.
The PUCO-approved deal requires a status report after five years, specifically in response to comments from OMA Energy Group and others to ensure that Vadata is living up to its commitments.
The OMA Energy Group intervened in the case and met with policymakers to remind them that one customer’s discount is another customer’s surcharge. The final approved deal includes some consumer improvements. 1/11/2018
Grant funding assistance is available to Ohio manufacturers who are investigating energy-efficiency projects in 2018 through the state’s Energy Efficiency Program for Manufacturers.
The grants can be used to identify energy efficiency recommendations or take a deep dive on specific equipment’s operation and energy impact. Past grant recipients have conducted an energy assessment of their entire plant, while others have focused on improving operations of key energy-intensive equipment, like air compressors, chillers or furnaces.
The state is offering a $1-for-$1 match in funds, up to $15,000 per manufacturing facility. Utility energy study funds are eligible for the manufacturers’ cost share.
The grant funding is limited, and available on a first-come, first-serve basis. Please contact John Seryak of Go Sustainable Energy, OMA’s energy engineering consultant, for more information and to apply for funding. 1/5/2018
The Public Utilities Commission of Ohio (PUCO) is planning for PowerForward 2018, a series of presentations about energy rate making and regulation over six days, March 6-8 and March 20-22.
The PUCO says that through this series, it intends to chart a clear path forward for future grid modernization projects, innovative regulations and forward-thinking policies.
Here are the topics planned to date for March.
Also, the PUCO is still calling for presentations. If you are interested in potentially presenting, contact the PUCO here. 1/10/2018
Transmission rates on electricity consumers are rising by billions of dollars across the PJM grid (which includes Ohio).
But, are consumers getting their money’s worth? Not if the rate regulation process is not rigorous. And, it is not for one type of project, “supplemental transmission projects,” for which determinations of necesssity or prudency are not required. Nor are competitive options.
Read more in this op-ed by Marc Gerkin, president and CEO of American Municipal Power. 1/4/2018