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News and Analysis

State Regulators Take Dim View of Customer Subsidized Renewables

January 18, 2019

Last week the staff of the PUCO filed comments opposing AEP Ohio’s application to charge customers for the development of 900 megawatts of renewable energy. Under the plan, all customers, even customers who purchase power competitively, would have to pay a new charge if they are in the AEP service territory.

The staff found that competitive markets are adequately supplying capacity and energy to meet the needs of AEP’s customers and, therefore, the project is not needed for reliability. The PUCO also expressed concern that requiring customers to subsidize a utility’s renewable generation activity would jeopardize competitive suppliers who are investing in renewable energy to serve customer demand for renewable energy.

While supportive of all forms of generation and fuel sources, the OMA has been an active opponent to the anti-competitive proposal and welcomes the PUCO staff comments. AEP faced similar concerns from state regulators last year in Oklahoma, West Virginia, and Virginia, locations where the company attempted to rate-base large scale renewable projects, but was denied. 1/17/2019

OMA Testifies Against AEP Ohio Plan to Charge Customers for New Renewable-Energy Generation

January 11, 2019

The OMA joined forces with other parties last week in filing testimony to oppose AEP Ohio’s proposed renewable energy subsidy.

AEP Ohio has an application pending with state regulators at the PUCO that would require all AEP customers to subsidize a large scale solar-energy generation site.

While the OMA supports ‘all of the above’ forms of energy generation, OMA insists that generation be competitively sourced as envisioned by Ohio’s electricity deregulation law of 1999.

Also filing testimony was the Office of the Ohio Consumers’ Counsel (OCC), Ohio’s government-appointed residential consumer advocate. OCC testified: “AEP’s regulatory proposal transfers financial and operating risk of power plants from AEP shareholders to AEP Ohio’s captive monopoly customers. This is contrary to the General Assembly’s plan for Ohio that, with limited exceptions, generating plants (including renewable projects) should be developed in the marketplace, without involvement of monopoly utilities and charges to their captive customers.” 1/10/2019

Reject FirstEnergy’s So-Called ‘Distribution Modernization’ Rider!

January 11, 2019

This week, OMA’s energy counsel Kim Bojko of Carpenter Lipps & Leland presented oral argument to the Supreme Court of Ohio urging the court to reject a customer-paid ‘distribution modernization’ rider that the PUCO approved in 2016.

Bojko argued that the PUCO’s decision was in error because the rider was used to shore up FirstEnergy’s finances, not to support grid modernization.

“Don’t let the name fool you. This rider has nothing to do with the distribution service or modernizing the grid,” said Bojko. She emphasized the point, saying, “Not one penny is to be spent on distribution. Instead it is a credit support rider.”

The court’s decision is expected mid- to late 2019. In the meantime customers in FirstEnergy service territory will continue paying this rider, even those who purchase power from a competitive supplier. Customers have already paid approximately $372 million for the first two years of this rider.

This work is supported by the OMA Energy Group; learn more here. 1/10/2019