Energy Management

Natural Gas Spot Prices Approached Record Highs in February

Last month, natural gas spot prices at several U.S. trading hubs approached record highs due to winter weather. According to the Energy Information Administration, at the benchmark Henry Hub, prices soared to $23.86 per million British thermal units (MMBtu), the highest real (inflation-adjusted) price since February 2003. Henry Hub prices averaged $5.49/MMBtu last month, the highest monthly average since February 2014. 3/15/2021

House and Senate Have Now Approved Repeal of HB 6 Nuclear Subsidies, Decoupling

This week, the Ohio House voted 86-7 to approve OMA-supported House Bill 128, legislation to repeal up to $150 million a year in nuclear generation subsidies authorized by House Bill 6. Also included in HB 128 are a repeal and refund of HB 6’s decoupling provisions and the “significantly excessive earnings” language authorized in the last state budget (HB 166) – both changes that benefited FirstEnergy.

The bill now goes to the Senate, which last week passed a similar repeal (Senate Bill 44). According to Gongwer News Service, Senate President Matt Huffman (R-Lima) has said he won’t object if House leaders want HB 128 to be the lead vehicle for HB 6 subsidies repeal. “At this point, I think it’s a matter of getting that issue behind us,” he said.

Meanwhile, Sen. Mark Romanchuk (R-Mansfield) has introduced two more bills to address HB 6 policy. Senate Bill 117 would repeal HB 6 subsidies for Ohio Valley Electric Corp. (OVEC) coal plants — including one in Indiana — and refund customers for those charges. Senate Bill 118 would repeal the up to $20 million a year in subsidies for five utility-scale solar projects. 3/10/2021

FirstEnergy Chooses Strah as CEO as PUCO Launches Another Review

FirstEnergy this week named Steven Strah as its new CEO, as the company continues to make changes amid the ongoing House Bill 6 scandal. Strah has been acting CEO since Chuck Jones was terminated last fall for his ties to HB 6. Meanwhile, the Public Utilities Commission of Ohio this week issued an order to update instructions to auditors who are reviewing FirstEnergy’s Delivery Capital Recovery rider – making it the fourth review of the company stemming from the HB 6 scandal. 3/8/2021

Senate Passes Repeal of HB 6 Nuclear Subsidies

On March 3, the Ohio Senate approved Senate Bill 44, legislation that repeals the nuclear generation subsidies authorized under House Bill 6. In its report, Gongwer News remarked: “The Senate’s unanimous passage of SB 44 marks a sharp contrast to two years ago when lawmakers were told the up to $150 million a year in state support was needed to stave off closure of two Energy Harbor plants.”

Meanwhile, the House continues work on its own plan to repeal the HB 6 nuke subsides via House Bill 128. Speaker Bob Cupp (R-Lima) has said that HB 128 could receive a committee and floor vote next week. The OMA supports both SB 44 and HB 128, but has called on lawmakers to senators to “finish the job” by also repealing costly customer-paid subsidies for coal power plants owned by OVEC. 3/4/2021

Increased Scrutiny on FirstEnergy Payment to Former PUCO Chair

Andrew Tobias of Cleveland.com has reported on a previously unnoticed disclosure by FirstEnergy that sheds additional light on the company’s $4.3 million payment to Sam Randazzo, the former chair of the Public Utilities Commission of Ohio (PUCO), shortly before he took the job as the state’s top utility regulator.

In legal disclosures filed in November, FirstEnergy said the January 2019 payment led to “conduct corresponding to such payment” — and to that person “acting at the request or for the benefit of FirstEnergy as a consequence of receiving such payment.”

According to Cleveland.com, FirstEnergy said the payment was a “non-compliance” event that violated its terms with the banks that lend it money, as was conduct by FirstEnergy officials “during the time period after such payment during which the individual was acting in any governmental or regulatory capacity.” 3/4/2021

Bill Would Retain Ohio’s Renewable Energy Requirement

Sen. Matt Dolan (R-Chagrin Falls) has introduced Senate Bill 89 to make an 8.5% renewable portfolio standard (RPS) permanent. Dolan has told the media that the bill represents a compromise necessitated by the passage of House Bill 6, which lowers Ohio’s renewable energy benchmarks from 12.5% to 8.5% by 2026 and terminates the RPS in 2027.

An 8.5% RPS would not be affected by FERC’s Minimum Offer Price Ruling (MOPR). Any RPS exceeding 8.5% would be subject to the MOPR (due to state subsidies), impairing new renewable projects’ ability to compete for PJM capacity revenue. In contrast, the growing market of private corporate renewable energy purchases will not be subject to the MOPR ruling. 3/2/2021

PUCO to Hold Energy Efficiency Workshops

The Public Utilities Commission of Ohio (PUCO) last week ended utilities’ energy efficiency cost recovery riders — as required by House Bill 6 — but said it would pursue a series of stakeholder meetings to further discuss the matter. The schedule for the workshops will be announced at a later date. For more on this development, read the story by Gongwer News Service. 3/1/2021

Honda Recognized for Energy Efficiency

OMA-member Honda has announced that its eight major U.S. plants — including four of its Ohio facilities — have earned the U.S. Environmental Protection Agency (EPA) ENERGY STAR Certificate for Outstanding Energy Efficiency, demonstrating the company’s longstanding commitment to reducing CO2 emissions. 3/1/2021

AG Dave Yost Visits OMA Energy Committee

During this week’s meeting of the OMA Energy Committee, Ohio Attorney General Dave Yost briefed members on his recent legal actions to halt implementation of key provisions of House Bill 6, the anti-market, scandal-ridden energy law that was opposed early by the OMA. Yost thanked the OMA for “stepping up” to oppose HB 6 and for the organization’s willingness to put its “reputation and resources on the line” through advocacy and legal opposition.

Other guests included Sen. Mark Romanchuk (R-Ontario), who briefed members on the progress of his Senate Bill 10 — the OMA-supported legislation to repeal HB 6’s decoupling provision, as well as the “significantly excessive earnings” language authorized in the last state budget (HB 166).

The committee was provided an in-depth look at what went wrong in Texas leading up to that state’s recent weather-related power failures. Susanne Buckley of Scioto Energy reviewed electricity market trends, while Darin King of NiSource/Columbia Gas of Ohio reviewed natural gas market trends. 2/25/2021

Senate to Vote on Repeal of HB 6 Nuclear Subsidies

On Feb. 23, the Ohio Senate Energy and Public Utilities Committee unanimously advanced Senate Bill 44 to repeal the nuclear generation subsidies authorized under House Bill 6. The full Senate is expected to consider SB 44 next week. The bill leaves intact HB 6’s $20 million in annual subsidies for select solar projects, but the repeal of the nuclear power subsidy would reduce customer charges by as much as $150 million a year.

Appearing before the Senate panel this week, OMA energy counsel Kim Bojko presented mostly supportive testimony of SB 44, but also urged senators to “finish the job” and repeal costly customer-paid subsidies for two aging coal power plants known as OVEC. (Watch this video of her testimony starting at the 6:00 mark.)

Meanwhile in the House, a similar variation of SB 44 received a second hearing this week. OMA testimony in support of House Bill 128 called on representatives to expand the legislation to repeal OVEC subsidies. 2/25/2021