News and Analysis
The OMA’s Energy Committee this week held its fourth and final scheduled meeting of the year. Chaired by Brad Belden, president of The Belden Brick Co., the meeting featured policy updates, as well as reports from the OMA’s energy engineer, John Seryak of RunnerStone LLC, and the OMA’s energy counsel, Kim Bojko of Carpenter Lipps & Leland LLP. Members also received briefings on the latest natural gas and electricity market trends.
The OMA will soon publish the 2020 meeting dates for all of its policy committees. 11/21/2019
Recently, House Bill 401 was introduced to strip the Ohio Power Siting Board of its authority to determine where wind farms can be located, instead giving that power to local governments. Sponsored by Rep. Bill Reineke (R-Tiffin), the bill would effectively allow a township to veto an approval by the state entity that has historically been authorized to review applications for new power plants and energy production sites.
A Senate companion bill has been offered by Sen. Rob McColley (R-Napoleon). Both Republican legislators hail from northwestern Ohio, where large-scale wind farms operate, and where some residents have protested plans for new wind projects. This week, nearly 100 witnesses submitted statements to the House Energy and Natural Resources Committee in support of the legislation. 11/20/2019
Total investment in Ohio’s resource-rich shale energy sector has reached $78 billion since tracking began in 2011, according to a Cleveland State University study. Prepared for JobsOhio, the report represents the most recent data available and covers investments through the second half of 2018.
Estimates show that by 2040, the Utica and Marcellus shale region — of which Ohio is a significant part — will supply nearly half of all U.S. natural gas production. 11/20/2019
A new report from the U.S. Energy Information Administration finds the U.S. in 2018 set new records in natural gas production, consumption and exports. The country’s natural gas consumption increased by 11% in 2018, driven by increased demand by the electric power sector. Pennsylvania and Ohio — states that overlie the Appalachian Basin — had the first- and third-largest year-over-year production increases for 2018. 11/18/2019
Lazard, one of the world’s top financial advisory and asset management firms, has released its annual report on the levelized cost of electricity — based on type of generation. The report shows some unsubsidized renewable costs are approaching the pricing of traditional generation. It also shows that nuclear power remains a competitive energy generation source ($27-$31 per MWh) compared to both renewables and natural gas combined cycle generation. 11/13/2019
Consistent with recent media statements, Ohio Senate Energy and Public Utilities Committee Chairman Steve Wilson (R-Maineville) announced this week that informational testimony on energy reliability will commence Dec. 10 as part of the Senate’s work on “comprehensive” energy policy.
Studies and expert insight dispel the notion that Ohio has a reliability problem. To the contrary, because of market-based generation, Ohio enjoys record high reserves of electric generation, which lesson the threat of shortages and price spikes. 11/14/2019
During an investor call this week, FirstEnergy CEO Chuck Jones announced the distribution utility would file a decoupling application with the PUCO as permitted by the recently enacted House Bill 6. Ohio’s other electric utilities could follow suit later this month.
Decoupling allows a utility to fully recover investments and operating costs at 2018 levels even if sales decline due to customer efficiency improvements. Gongwer News reported that the FirstEnergy CEO touted the decoupling rider for making the monopoly “recession proof.”
According to an OMA analysis of HB 6, the nuclear bailout bill includes provisions that will impose new costs on customers, among them the new decoupling rider. Currently, FirstEnergy recovers part of its distribution costs through its energy efficiency rider, which is going away under HB 6. As a result, FirstEnergy claims it cannot recover its entire distribution costs, and that the decoupling mechanism is necessary to recover costs formerly captured by the terminated energy efficiency charge. Captive customers will be required to pay the utility to make it whole from the loss of energy efficiency profits. Many larger industrial customers have already opted-out of the energy efficiency rider, so the decoupling rider will constitute a new cost to those customers.
Make no mistake, this is another utility profit scheme that comes at customers’ expense. This topic will be discussed at the Nov. 21 OMA Energy Committee meeting. Support ongoing energy advocacy by joining the OMA Energy Group. 11/7/2019
In mid-October, the Ohio Power Siting Board deviated from its standard practice by denying final approval of a larger, 80-megawatt solar project planned for southern Ohio. The board, which must approve any new commercial power generation facility — traditionally OKs new generation facilities that have been advanced to this stage.
The move has alarmed renewable energy developers and clean energy advocates. Moreover, it raises questions about how Ohio’s siting process will work going forward. Billions of dollars are being invested by businesses to develop new gas and renewable power generation in Ohio. 11/7/2019
As fallout from the failed referendum effort to overturn Ohio’s nuclear subsidy law (HB 6), customers and developers of new power plants seem to be the target of political retribution. This week, the sponsors of a proposed constitutional amendment presented testimony in support of House Joint Resolution 2. The measure would place an amendment to Ohio’s constitution on the statewide ballot, enabling Ohioans to cast a vote to bar foreign interests from controlling “critical energy infrastructure” in Ohio.
In their testimony, the resolution’s sponsors — State Reps. Don Manning (R-New Middletown) and Jamie Callender (R-Concord Township) invoked language reminiscent of McCarthyism and the Red Scare. The proposal is extremely troubling on a policy level. If approved, it could have dire consequences for power customers and Ohio’s economy. It also establishes a precedent of prohibiting foreign investment of business in Ohio.
Read this overview of the resolution prepared by OMA general counsel at Bricker & Eckler. 10/31/2019
The Ohio House Energy and Natural Resources Committee this week held a third hearing on House Bill 104. The legislation is intended to spur the development of molten salt reactor (thorium) power generation by creating a public-private partnership and a for-profit lobbying company to advance policy aimed at attracting research and development of the presently unviable technology. Under HB 104, the state-supported entities would be given eminent domain authority to seize private property to site new nuclear waste disposal sites in Ohio.
Last week, a series of proponents appeared to testify in favor of the bill. The OMA has not yet provided testimony. However, the OMA’s Ryan Augsburger wrote the bill’s primary sponsor Rep. Dick Stein (R-Norwalk) this week to express concerns. The bill will be discussed at the Nov. 21 OMA Energy Committee meeting. 10/31/2019