News and Analysis
Nuclear Subsidy Repeal Nears Finish Line
March 26, 2021While 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, 2021Electric 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, 2021This 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, 2021This 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, 2021Last 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
Jenifer French Picked to Lead PUCO
March 26, 2021Gov. Mike DeWine has appointed Jenifer French as chair of the Public Utilities Commission of Ohio (PUCO). A former Franklin County Common Pleas Court judge, French is filling the vacancy left by Sam Randazzo, who resigned in November after an FBI search of his home related to the House Bill 6 investigation. 3/22/2021
Pennsylvania Cracker Plant Will Boost Plastics Supply
March 26, 2021Amid the current plastics shortage, there’s some good news from across the state border as Shell Pennsylvania Chemicals’ cracker plant in Beaver County, Pennsylvania will reportedly be fully operational next year. Thanks to the plentiful natural gas reserves of the Marcellus and Utica shale plays, this is the first U.S. cracker operation built outside of the Gulf Coast in more than two decades. 3/22/2021
HB 6 Scandal Reverberates
March 19, 2021This week, former U.S. Attorney David DeVillers addressed the governing board of the Office of the Ohio Consumers’ Counsel (OCC). DeVillers said he expects to see many more charges stemming from the federal bribery investigation into the House Bill 6 scandal, according to Cincinnati.com (subscription).
Also presenting at the OCC board meeting was John Seryak, the OMA’s energy technical consultant, who provided his analysis on subsidies to coal power plants, including HB 6’s OVEC subsidies, which constituted a third giveaway to utilities. The OMA continues to call for the repeal of the OVEC subsidies.
Also this week, longtime Statehouse lobbyist Neil Clark was found dead outside his Florida home. Clark was one of five people — including former House Speaker Larry Householder — charged last summer with racketeering by federal prosecutors. Meanwhile, billionaire financier Carl Icahn has reached a deal with FirstEnergy to ensure his firm has two seats on FirstEnergy’s board. 3/18/2021
Bill Would Prohibit Local Energy Bans
March 19, 2021This week, Rep. Al Cutrona (R-Canfield) gave sponsor testimony on House Bill 192, which would prevent local governments from prohibiting or limiting:
- the use of fossil fuels for electricity generation; and
- the construction or use of a pipeline to transport oil or gas.
Rep. Cutrona said the bill is intended “to prevent possible rate increases for those throughout the state and the Mahoning Valley.” 3/18/2021
States Sue Biden for Revoking Keystone XL Permit
March 19, 2021Ohio is part of a coalition of 21 states suing the Biden administration over its decision to stop construction of the Keystone XL oil pipeline. The lawsuit argues that revoking the cross-border permit is a regulation of interstate and international commerce that should be left to Congress, and that President Biden’s decision was arbitrary and capricious. 3/18/2021