Energy Management

Act Now to Prevent Electricity Cost Increases

A projected $6 billion in additional electricity costs are at stake in two cases pending before the Public Utilities Commission of Ohio (PUCO).  Each case would provide massive subsidies, at customer expense, to FirstEnergy and AEP for power plants that are not clearing the markets in competitive auctions.

These cases are on a political fast track.  It is critical for manufacturers to act now to urge defeat of the utililty proposals.  Use the tools of OMA Manufacturing Action Center to communicate to public officials.

Read an analysis of potential costs you might pay.  And, read an executive briefing and talking points on the matter.

PUCO, the 2015 Holiday Scrooge

The Public Utilities Commission of Ohio (PUCO) said “bah, humbug” to the holidays and moved to fast track consideration of the pending power purchase agreement cases of both FirstEnergy and AEP.  The process is now so rushed that observers are questioning the effect on stakeholders’ rights of due process.

The OMA Energy Group worked through the holidays to prepare and file additional testimony in both cases.

In supplemental testimony to the FirstEnergy case, OSU economist Dr. Edward (Ned) Hill said:  “(The proposal) re-imposes an oligopoly in the electric generation market,” deterring new entry and hurting long term reliability.

Also in supplemental testimony in that case, OMA consulting engineer John Seryak said:  “(The new stipulation) creates costs and precedents for years to come.”  He noted a lack of “thorough, transparent cost analysis,” which should be a minimum requirement for PUCO consideration of the proposal.

In the AEP case, Hill testified:  “Typically, if a market participant cannot compete in a competitive market, it will fail. Subsidizing an existing market participant in the hope that it may be able to compete at some point in the future is not in the public interest, nor is it good public policy. It will only deter entry and keep prices higher than they would otherwise be in a competitive market.”

And, Seryak in the AEP case testified that the renewable energy proposed in the case, which would be financed by a non-bypassable rider (that is, every AEP customer would have to pay, including those who have shopped competitively for power), would cause many customers to pay twice for energy.

Exelon Offers Power at $2 Billion Less than FirstEnergy

In bombshell testimony in the FirstEnergy power purchase agreement case before the Public Utilities Commission of Ohio (PUCO), Exelon offered power at a cost $2 billion less than FirstEnergy is proposing, over the eight-year term of the proposal.

Exelon opposes the FirstEnergy proposal and suggested that the PUCO should let the competitive marketplace set prices.  It noted that other competitors might have a better price than even Exelon.