News and Analysis
Electric Re-Regulation or Surgical Strike?
February 2, 2017During a recent investor call, AEP CEO Nicholas Akins commented about what a utility-driven re-regulation legislative proposal might look like saying, “There are already drafts of legislation circulating.”
According to reporter John Funk of the Cleveland Plain Dealer who summarized the AEP call, Akins said: “The companies have been looking for a way to escape the perils of market prices that come with deregulation or at the very least craft ‘surgical’ amendments to state laws that since 2000 have been gradually moving the industry into market-based pricing.”
Funk noted that AEP wants to build wind and solar farms and maybe new gas plants, and that FirstEnergy is interested in finding a way to subsidize its two nuclear power plants.
The OMA opposes customer paid subsidies to utilities for non-economic activity and has been fighting utilities’ proposals at the PUCO through its OMA Energy Group. Markets, not regulators, deliver better service, price and innovation.
Join a discussion about re-regulation legislation potential at the February 9 meeting of the OMA Energy Committee. Register here. 2/2/2017
Markets v Command-and-Control Regulation
January 27, 2017Are markets reducing the cost of electricity generation relative to command-and-control regulated
dispatch? This study from the University of Chicago answers this question.
The study finds that markets reduce the cost of generating electricity by about $3 billion per year through increased efficiencies and coordination both within and across areas.
By using the lowest-cost plants 10% more often, markets reduce the costs from using uneconomical units by 20% per year. Additionally, the cost reductions from trading electricity across regions increases by 20% per year.
The report concludes: “As policymakers are faced with the question of whether the de-regulation of electricity markets should be expanded or scaled back, these findings suggest the benefits realized by more efficient allocation of output though market-based dispatch have far outweighed any imperfections in the market system.” 1/26/2017
PUCO Nominating Council Sends Names to Governor
January 27, 2017The Public Utilities Commission of Ohio (PUCO) Nominating Council this week submitted the names of five finalists to be considered by Gov. John Kasich to fill two commissioner positions.
The Nominating Council recommended the following individuals to fill the unexpired term ending April 10, 2020: Daniel Conway, Lawrence Friedeman, J. Edward Hess and Raymond Lawton.
The Nominating Council also recommended Gregory Williams be included for consideration for the five-year term commencing on April 11, 2017 and end April 10, 2022, along with the remaining three individuals from above not selected by the governor.
The PUCO Nominating Council is a 12-member panel charged with screening candidates for the position of commissioner. 1/26/2017
24 Apply to PUCO
January 20, 2017Twenty four applicants for two open seats on the Public Utilities Commission of Ohio (PUCO) were submitted by the deadline earlier this month. The open seats are the result of the pending expiration of Commissioner Lynn Slaby’s term, which ends in April, and the resignation of Howard Petricoff, who chose to withdraw his nomination rather than risk his appointment being denied by the Senate.
Applicants include 10 Democrats, 10 Republicans and four independents
The PUCO’s 12-member nominating council will compile a short list of top candidates for interviews to take place next week. Finalists will then be forwarded to the governor who will make the appointments within 30 days of receiving the names.
State law prohibits any more than three members of the PUCO to be affiliated with either major party, but that’s a nonfactor given the committee’s current makeup; Gov. Kasich will be able to make appointments from applicants of any political affiliation. 1/19/2017
State Offers Low-Interest Loans for Energy Efficiency Projects
January 13, 2017Ohio’s Energy Loan Fund is now accepting applications for low-interest financing to install efficiency measures that reduce energy by at least 15%. Technical assistance is available to help eligible applicants identify energy efficiency improvements in their facilities and to facilitate the required energy audit.
Loan amounts vary depending on the project and can be from $250,000 up to $2 million.
To apply, organizations must first register and submit a letter of intent. Qualified applicants who submit a letter of intent will receive written instructions from Ohio Development Services Agency about how to access the online loan application.
Program guidelines and the application process can be found here. Questions about the program can be emailed here. 1/11/2017
A Second PUCO Seat Opens
January 13, 2017Commissioner Lynn Slaby of Public Utilities Commission of Ohio has announced that he will not seek reappointment from Governor Kasich when his term expires this spring. Now, two of the five seats that need to be filled by the governor.
Late last year, Commissioner Howard Petricoff resigned when there were indications that the Senate might not confirm his appointment to the powerful agency. His appointment was opposed by some public utilities. 1/12/2017
Governor Vetoes Energy Standards Bill
January 6, 2017Just days before the conclusion of the 131st General Assembly, Governor John Kasich vetoed House Bill 554, a bill that would have made the implementation of the state’s energy standards optional for electric utilities, for two years.
Kasich had warned legislative leaders repeatedly that he would not accept legislation that weakens the standards or extends the already frozen phase-in schedule of renewable energy standards and energy efficiency standards. Read the governor’s reasons for vetoing the bill.
After the veto, the General Assembly adjourned sine die, lacking the votes for an override. 1/5/2017
Efficiency Project Rebate Money for OMA Members in AEP Ohio Territory
January 6, 2017OMA’s energy partner, Go Sustainable Energy, recently secured $250,000 in rebates on behalf of Ohio manufacturers in AEP Ohio’s Bid4Efficiency auction.
AEP Ohio holds the annual auction to create incentives for customer energy efficiency projects. Rebates awarded by the program are eligible to exceed AEP’s $25,000 rebate cap; projects will be compensated at $0.043/kWh saved.
If your company is in AEP territory and you are completing or planning an efficiency project in 2017, please contact John Seryak to learn more. Funding will be available to OMA members on a first-come, first-served basis. 1/5/2017