News and Analysis
During inaugural meetings of standing House committees this week, we got a glimpse of what is coming down the pike. Statehouse observers believe a legislative proposal is forthcoming that would bailout the uneconomic nuclear power plants in Lake and Ottawa Counties.
Lawmakers on three separate House panels will likely touch the proposal. Rep Dick Stein (R-Norwalk) co-chair of a subcommittee on Energy Generation confirmed that preserving the nuclear power plants is a priority. Rep. Stein also expressed support for molten salt, thorium nuclear reactors.
House Energy Committee Chair Nino Vitale (R-Urbana) was quoted in Statehouse news media as saying, “We seriously have to look at generation and the mix of what Ohio’s doing.” And, “We’ve had some brownout situations. We’ve had some issues with PJM Interconnection in terms of how we’re putting energy into that. One of the key issues for our state is if we’re an energy producer it helps attract business to the state because our rates will be lower and it also helps your average citizen.”
Meanwhile, House Public Utilities Committee Chair Jamie Callender (R-Concord) indicated that nuclear bailout legislation could come to his committee or to the Energy & Natural Resources Committee, and that wind setbacks will also be a likely subject for legislative reform. In an interview following the committee meeting, he expressed concern that Ohio doesn’t produce enough power to meet its own needs while conceding the region enjoys a surplus of electricity. 2/14/2019
This week PUCO Chairman Asim Haque submitted his letter of resignation to Governor DeWine.
In a PUCO press release that included a list of Haque’s significant accomplishments, Haque said: “I would not be doing this experience, nor my feelings about public service to this state any justice by expressing the common refrain of being “honored” to have served. It is of course true that I am deeply honored to have served. I think, however, it is more revealing, more personal for me to say that this experience has been an absolute dream. …”
Haque described his next position: “… I have accepted a job with PJM Interconnection in suburban Philadelphia. It is the regional transmission organization and wholesale market operator for thirteen states (including Ohio) and the District of Columbia. Its mission is similar to that of the PUCO’s, as PJM is tasked with providing reliable power at least cost to a large footprint in this country. …” 2/4/2019
Gov. DeWine this week appointed Columbus attorney and lobbyist, Samuel Randazzo to a seat on the PUCO. At the same time, the governor designated Mr. Randazzo as chairman of the PUCO. His five-year term will begin in April. 2/5/2019
This week saw renewed legislative interest in forcing Ohio electric customers to pay to bailout uneconomic nuclear power plants. House Speaker Larry Householder voiced support for preserving the plants lauding their environmental benefits.
Toledo Blade quoted the Speaker as saying, “I think it’s a benefit to the entire state of Ohio to have those non-emissions plants,” perhaps opening the door to new charges on power bills of all Ohio investor-owned utility customers.
Meanwhile, the Columbus Dispatch ran dueling columns on the topic. Former New Hampshire governor and U.S. Senator Judd Gregg made the case for bailing out nuclear power to protect jobs and promote clean fuel, while former Ohio Secretary of State Ken Blackwell argued against bailouts calling them crony capitalism.
Get ready for another electrifying debate. The OMA Energy Committee will discuss this issue at its March 12 meeting. 2/7/2019
The PUCO Nominating Council met this week to interview nine candidates for a commissioner vacancy on the commission.
The nine candidates were selected from a field of twenty-three applicants.
Following the interviews, the council advanced four finalists: Gene Krebs, a former state legislator and former board chair of the Office of the Ohio Consumers’ Counsel (OCC); Dennis Deters, a court of appeals judge in Cincinnati; Bryce McKenney, an attorney at the OCC; and Sam Randazzo, a lobbyist for the IEU-Ohio.
Governor DeWine will consider the slate of four to appoint a new commissioner to a five-year term. 1/31/2019
Late last week, persons interested in standing for nomination and appointment to a soon-to-be vacant seat on the Public Utilities Commission of Ohio (PUCO) submitted applications. Commissioner Tom Johnson announced he will not seek reappointment.
The list of applicants includes politicians, lawyers and lobbyists, an academic and some business people. Hannah News Service lists the applicants.
Soon a nominating committee will hone the list of 23 to four names which will be sent to Governor Mike DeWine; he is expected to choose the new commissioner from among those names. 1/24/2019
Bankrupt FirstEnergy Solutions (FES) continues to angle for the General Assembly to enact legislation to bailout its uneconomic power plants. In releasing details of its bankruptcy restructuring, the company also announced it had terminated a contract to sell its retail business to Exelon.
John Funk of the Cleveland Plain Dealer wrote that a state bailout might be more feasible this year due to the election of Speaker Larry Householder, who has announced plans to create a new panel of lawmakers to focus on electric generation.
The OMA has been a leading opponent of bailouts for power plants that are not needed. The OMA Energy Committee will meet next on March 12 to review this and all energy matters that are relevant to Ohio manufacturers. 1/24/2019
Last week the staff of the PUCO filed comments opposing AEP Ohio’s application to charge customers for the development of 900 megawatts of renewable energy. Under the plan, all customers, even customers who purchase power competitively, would have to pay a new charge if they are in the AEP service territory.
The staff found that competitive markets are adequately supplying capacity and energy to meet the needs of AEP’s customers and, therefore, the project is not needed for reliability. The PUCO also expressed concern that requiring customers to subsidize a utility’s renewable generation activity would jeopardize competitive suppliers who are investing in renewable energy to serve customer demand for renewable energy.
While supportive of all forms of generation and fuel sources, the OMA has been an active opponent to the anti-competitive proposal and welcomes the PUCO staff comments. AEP faced similar concerns from state regulators last year in Oklahoma, West Virginia, and Virginia, locations where the company attempted to rate-base large scale renewable projects, but was denied. 1/17/2019
The OMA joined forces with other parties last week in filing testimony to oppose AEP Ohio’s proposed renewable energy subsidy.
AEP Ohio has an application pending with state regulators at the PUCO that would require all AEP customers to subsidize a large scale solar-energy generation site.
While the OMA supports ‘all of the above’ forms of energy generation, OMA insists that generation be competitively sourced as envisioned by Ohio’s electricity deregulation law of 1999.
Also filing testimony was the Office of the Ohio Consumers’ Counsel (OCC), Ohio’s government-appointed residential consumer advocate. OCC testified: “AEP’s regulatory proposal transfers financial and operating risk of power plants from AEP shareholders to AEP Ohio’s captive monopoly customers. This is contrary to the General Assembly’s plan for Ohio that, with limited exceptions, generating plants (including renewable projects) should be developed in the marketplace, without involvement of monopoly utilities and charges to their captive customers.” 1/10/2019
This week, OMA’s energy counsel Kim Bojko of Carpenter Lipps & Leland presented oral argument to the Supreme Court of Ohio urging the court to reject a customer-paid ‘distribution modernization’ rider that the PUCO approved in 2016.
Bojko argued that the PUCO’s decision was in error because the rider was used to shore up FirstEnergy’s finances, not to support grid modernization.
“Don’t let the name fool you. This rider has nothing to do with the distribution service or modernizing the grid,” said Bojko. She emphasized the point, saying, “Not one penny is to be spent on distribution. Instead it is a credit support rider.”
The court’s decision is expected mid- to late 2019. In the meantime customers in FirstEnergy service territory will continue paying this rider, even those who purchase power from a competitive supplier. Customers have already paid approximately $372 million for the first two years of this rider.
This work is supported by the OMA Energy Group; learn more here. 1/10/2019