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News and Analysis

U.S. Energy Consumption Fell 7% in 2020

April 9, 2021

U.S. energy consumption fell a record 7% last year, largely due to the pandemic lockdowns. It was the largest annual decline by percentage and in absolute terms since 1949, when the U.S. Energy Information Administration began recording consumption data. 4/5/2021

Gov. DeWine Signs HB 128 to Partially Repeal HB 6

April 2, 2021

Gov. Mike DeWine this week signed HB 128, which cancels out the nuclear subsidy provisions of HB 6 (133rd General Assembly), originally targeted to support the Davis-Besse and Perry nuclear plants to the tune of up to $150M/year. Later, of course, it was learned how HB 6 was fatally flawed by scandal. Earlier this year, the OMA testified on HB 128.

HB 128 also removes the costly HB 6 “decoupling” provision, which tied FirstEnergy future profits to record year 2018 regardless of the amount of power sold, about $978M annually. The new law also revokes a change made to the Significantly Excessive Earnings Test, which benefited only FirstEnergy by allowing the company to combine profits across three of its companies to avoid customer refunds from its overly profitable company.

The new bill retains HB 6’s subsidies for utility-scale solar projects and for two coal plants (one in Ohio, one in Indiana), leaving the door open for more corrective action that could cancel these subsidies that work against ratepayers.

The bill was voted unanimously in the Senate 33-0, 86-7 in the House originally, but then the House unanimously (89-0) concurred with the Senate amendments. HB 128 was sponsored by Reps. James Hoops (R-Napoleon) and Dick Stein (R-Norwalk). 3/31/2021

Bipartisan Senate Bill Would End Subsidies for OVEC Coal Power Plants

April 2, 2021

Sen. Romanchuk (R-Mansfield) and Sen. Hearcel Craig (D-Columbus) this week presented compelling testimony on SB 117 to repeal the subsidies granted in 2019’s HB 6 for two uneconomical coal plants owned by the Ohio Valley Electric Corp. (OVEC), one of which is in Indiana.

The owners of the plants are AEP, Duke and AES Ohio (formerly Dayton Power & Light). The proponents say that ratepayers should not be forced to pay for past poor business decisions.

Separately, Sen. Romanchuk also testified in support of SB 118 to rollback $20 million a year in payments to five solar projects – another subsidy folded into the corrupt HB 6.

Both measures are supported by OMA to continue to get Ohio’s energy policy back on track. More to come. 3/31/2021

FirstEnergy Reverses – Will Refund Controversial Decoupling Charges

April 2, 2021

FirstEnergy announced it will return $26M in decoupling charges collected from customers under the 2019 HB 6 law. The company voluntarily halted collections earlier this year under a settlement with Attorney General Dave Yost. The OMA Energy Group has been an active voice in legal proceedings, partnering with the Attorney General and Office of Consumers’ Counsel, consistently advocating for refund of decoupling dollars.

FirstEnergy originally indicated it would not refund the $30M it collected under the authority of HB 6. Noting that the company is not refunding all ill-gotten gains, Ohio’s Consumers’ Counsel Bruce Weston said that Ohio should not allow FirstEnergy to walk away from HB 6 with even a penny of consumers’ money.

With this week’s passage of HB 128, which removed the HB 6 decoupling provision from law, FirstEnergy apparently reconsidered its position. The decoupling provision would have guaranteed FirstEnergy’s annual revenue at its 2018 record-setting level regardless of energy sold. 3/31/2021

Could Texas Outages Happen Here?

April 2, 2021

Ohio’s electric system is fundamentally different from the one in Texas, and Ohio has learned from prior experience.

Read a short post by the Public Utilities Commission of Ohio about how the two systems differ and how Ohio’s grid is poised for weather events. 3/30/2021

Nuclear Subsidy Repeal Nears Finish Line

March 26, 2021

While the investigation continues into the $60 million racketeering scandal tied to House Bill 6, the legislation is being dismantled less than two years after its enactment. In a move that captured even national press, the Ohio Senate this week voted unanimously to approve House-passed legislation that will repeal HB 6’s roughly $150 million in annual, customer-funded nuclear generation subsides. House Bill 128, which has the OMA’s support, has been sent to Gov. Mike DeWine for his consideration.

Provisions of HB 128 are similar to earlier Senate-approved legislation: Senate Bill 44 to repeal the nuke subsidies and Senate Bill 10 to repeal HB 6’s decoupling mechanism. In addition to ending the nuclear subsidies and reversing HB 6’s decoupling changes, HB 128 will also repeal past budget language that modified the “significantly excessive earnings test” (SEET).

Gongwer News Service reports, “Although the nuclear debate appears close to its finish, debate over other components of HB 6 are likely to continue with legislation pending to examine other aspects of the law,” including OVEC subsidies. The OMA has opposed HB 6 since its introduction in 2019 — and continues to advocate for the repeal of its subsidies, including for OVEC.

House Speaker Bob Cupp told reporters Thursday that Rep. Jim Hoops (R-Napoleon) has pledged to hold hearings on the remaining HB 6 issues, including OVEC. 3/25/2021

AEP Transmission Rates Set to Increase Again

March 26, 2021

Electric transmission costs for AEP Ohio customers continue to go up. AEP Ohio filed its new rates for the Basic Transmission Cost Rider (BTCR), set to take effect next month. Primary service customers will see a 10% increase, while secondary customers an increase of 22% and sub-transmission and transmission customers will see a whopping 25% hike. (The BTCR is listed as the “transmission” line item on AEP Ohio electric customer bills.)

BTCR pilot tariff customers will see a 43% to 54% hike, but they have the ability to manage their peak transmission load to mitigate the increase. BTCR pilot rates could have been higher. For example, AEP Ohio had requested a 164% year-over-year increase on primary service customers. The OMA Energy Group (OMAEG) intervened to mitigate these cost increases.

Underlying the rate increase is AEP’s rising cost of transmission, now 254% of its 2015 cost — and five times higher than neighboring AES Ohio (formerly DP&L). The OMAEG has worked to protect manufacturers through the BTCR pilot, which allows manufacturers to manage their transmission costs through peak-load management strategies like on-site generation, load curtailment, and off-peak hour production. Contact the OMA’s Rob Brundrett to learn how the OMAEG works to protect manufacturers. 3/25/2021

Natural Gas Access Bill Gets Second Hearing

March 26, 2021

This week, House Bill 201 received its second hearing in the House Energy and Natural Resources Committee. As outlined by its sponsor, Rep. Jason Stephens (R-Kitts Hill), the bill would give customers the “right to choose the energy option that works best for them, while making sure every community in Ohio with natural gas maintains the ability for its citizens and its businesses to access this abundant source of Ohio energy.”

While the OMA has long agreed that local governments should not ban the access to natural gas, there is some concern HB 201, as currently drafted, could create new, increased distribution riders for customers. The OMA will be engaging with Rep. Stephens and committee members for clarification. 3/25/2021

OMA Testifies on Large Scale Solar, Wind Bill

March 26, 2021

This week, the OMA submitted opponent testimony on House Bill 118 and Senate Bill 52. The companion bills would allow local townships to hold referendums on large-scale solar and wind bills that have been approved by the Ohio Power Siting Board.

As the OMA stated in its testimony, the development of both solar and wind power in Ohio — as in other states — “has continued to increase over the past decade as companies and citizens demand sustainable and cleaner options for their electricity generation. Ohio’s statewide approval process, managed by the Ohio Power Siting Board, has been an effective mechanism to site such projects, weighing the pros and cons for the state and its citizens. For clarity, uniformity of policy, and economy of process, the OMA urges a statewide approach for such projects and decisions.” The OMA will remain engaged as the legislation moves through the process. 3/25/2021

Columbia Gas Looks to Increase Transmission Costs

March 26, 2021

Last summer, Columbia Gas Transmission filed a rate case proposal with the Federal Energy Regulatory Commission (FERC) to recoup roughly $3 billion in capital and operational expenses associated with its transmission system. As filed, the proposal has the potential to increase transmission charges up to 78%.

The OMA Energy Group (OMAEG) intervened in the case to protect manufacturers’ interests, specifically to reduce the proposed rate increase and eliminate any new penalties or operating restrictions. The proposed increased rates have been implemented, subject to refund, but implementation of the new penalties and operating restrictions have been delayed pending ongoing settlement discussions.

A hearing is expected to commence in September. Members that are feeling the impacts of this case — or are concerned about its effects — can reach out to the OMA to learn how they can participate in the proceedings by joining the OMAEG. Contact Rob Brundrett. 3/25/2021