Energy Management

Bill Takes Aim at New Wind, Solar Energy

A pair of state senators from Northwest Ohio have introduced legislation to empower local governments to reject the siting of new wind or solar generation. According to analysis from the non-partisan Legislative Services Commission, Senate Bill 52 would allow township voters to hold a referendum to approve or reject new generation projects that have been approved by the Ohio Power Siting Board — the agency that has supervised the siting of power generation for decades. (An identical version of the bill has been offered in the House with House Bill 118.)

Supported by groups opposing renewable energy development, SB 52 and HB 118 would detcer development of new wind farms or solar arrays, which already faces heavy restrictions in Ohio. OMA Managing Director of Public Policy Services Rob Brundrett reported on the legislation at this week’s OMA Energy Committee meeting, saying the bills may have a tough road ahead.

The OMA is monitoring the legislation with interest and will be advocating for professional siting policies that allow markets to work, including markets for renewable energy and other energy innovations. Read more about the OMA’s energy policy goals. 2/25/2021

First Step to HB 6 Repeal: Senate Passes Romanchuk Bill

The Ohio Senate this week unanimously passed Senate Bill 10 — the OMA-supported bill introduced by Sen. Mark Romanchuk (R-Mansfield) to repeal House Bill 6’s decoupling provision, which allowed FirstEnergy to lock in annual guaranteed revenue at record-setting 2018 levels ($978 million).

SB 10 would also repeal the “significantly excessive earnings” provision authorized in the last state budget (HB 166). That change to the so-called SEET test had allowed FirstEnergy to combine profits across its three companies, offsetting “significantly excessive” Ohio Edison gains with those from less profitable companies, thereby avoiding related customer refunds.

Under SB 10, revenue collected under these provisions would be refunded. Anticipated decoupling costs for customers were estimated at $17 million for 2020 and more than $101 million for 2021 for all customer classes. SEET refund amounts are yet to be determined.

SB 10 now goes to the House for consideration. Meanwhile, Senate President Matt Huffman (R-Lima) has said he hopes to bring a nuclear subsidies repeal plan (Senate Bill 44) to the floor in about two weeks and that he expects the repeal legislation to become law.

These developments and more will be covered at the Feb. 25 OMA Energy Committee meeting. Guest speakers will be Sen. Romanchuk and Attorney General Dave Yost. Register here. 2/18/2020

Another Bill to Repeal HB 6 Nuclear Subsidies

Another bill has been introduced at the Statehouse to repeal the nuclear subsidies authorized by the scandal-plagued House Bill 6. Remarkably, the new legislation is sponsored by two of HB 6’s strongest supporters in 2019.

House Bill 128 was introduced by Rep. James Hoops (R-Napoleon) — chair of the House Public Utilities Committee — and Rep. Dick Stein (R-Norwalk), a vocal proponent of nuclear energy. The bill, which received its first hearing this week, would rescind HB 6’s $150 million a year in subsidies provided to Energy Harbor, owner of Ohio’s two nuclear power plants.

In short, HB 128 would:

• Repeal $170 million in HB 6 generation subsidies, including $20 million a year for a handful of solar plants;
• Eliminate the decoupling provision that locked in FirstEnergy revenue at record-setting 2018 levels ($978 million); and
• End the change that reworked the “significantly excessive earnings” test to benefit FirstEnergy.

The sponsors of HB 128 say repeal of the subsidies is now necessary so the plants may continue to sell electricity into the PJM capacity market. (The OMA spotlighted this issue more than a year ago.)

The Senate, meanwhile, has its own subsidy-repeal plan in Senate Bill 44. 2/17/2021

FirstEnergy Ends Another Consumer Fee; More Questions Raised About $4M Payment to Randazzo

FirstEnergy announced this week it was ending a “lost distribution revenue” fee the utility has collected since 2011. In addition, the utility said it was taking other “proactive steps” in an attempt to repair its reputation amid the House Bill 6/Larry Householder bribery and racketeering scandal. This comes just two weeks after FirstEnergy announced it would forego the decoupling fee authorized by HB 6.

Meanwhile, Cleveland.com reporter Andrew Tobias reports that in a new disclosure to federal regulators, FirstEnergy is bringing renewed attention to a questionable $4 million payment the company made to former Public Utilities Commission of Ohio (PUCO) Chairman Sam Randazzo. The company now believes the payments “may have been for purposes other than those represented within the consulting agreement” that FirstEnergy had with Randazzo. The discovery of the payment prompted FirstEnergy to fire its then-CEO and other top executives last fall. 2/18/2021

PUCO Nominating Council Selects Six for Interviews

Six individuals will be interviewed later today (Friday, Feb. 19) in round two of the search to find the next Public Utilities Commission of Ohio commissioner for a seat that opens in April. Last month, Gov. Mike DeWine rejected the initial list of four finalists submitted by the PUCO Nominating Council.

Those selected for interviews are:

• Daniel Shields, director of the Ohio Consumers’ Counsel’s analytical department (Independent);
• Jade Davis, vice president of external affairs for Cleveland-Cuyahoga County Port Authority (Democrat);
• Jenifer French, former Franklin County Common Pleas Court judge (Republican);
• Melissa Shilling, chair of the Environmental Review Appeals Commission (Republican);
• Nancy Hammond, former Fayette County Common Pleas Court judge (Republican); and
• Virginia King, Refining Sustainability Manager for Marathon Petroleum LP (Republican).

After conducting private interviews, the council will advance four finalists to the governor. The appointment is subject to Senate approval. 2/19/2021

Cold Messes With Texas (and Its Electric Reliability)

This week’s massive winter storms and frigid temperatures wreaked havoc over much of the U.S. Texas has seen the most outages, with businesses and residences left in the dark and sending spot electric prices through the roof. Observers and pundits have been quick to point fingers at different electric generation technologies, regulatory constructs, energy policies, and even Texas’ go-it-alone electrical grid. Could this happen in Ohio?

The 2014 polar vortex knocked out 40,200 megawatts (MW) of power generation in Ohio and the region. Nothing was spared. Natural gas, nuclear, and renewables all had failures. Coal was impacted heavily, with 13,700 MW of outages. However, Ohio’s power stayed on because the Buckeye State is part of a 13-state power grid market called PJM Interconnection. (PJM is widely considered one of the premier grid and wholesale market structures in the world.)

Like other multi-state grids, PJM allows diverse generators from a multi-state region to bid into the capacity market, resulting in a significant reserve capacity (over 20% more power than needed). There were only sporadic outages in Ohio and other PJM states this week.

In contrast, Texas resisted joining a multi-state grid in favor of a walled-off or island approach so that only Texas generation can supply Texas markets. The Texas grid, operated by the Electric Reliability Council of Texas (ERCOT), is not subject to federal transmission regulations and does not have a capacity market that functions to assure adequate electricity supply, especially during peak events.

During Ohio’s House Bill 6 debate, some state lawmakers expressed condemnation of PJM in favor of a Texas-like model in which utilities and generators win and customers are exposed to considerable risk. But this week has served as another reminder that in times of extreme weather, PJM’s multi-state regional market has kept the power on. 2/18/2021

EIA: Renewables Expected to Be Predominant Source of Electrical Generation by 2030

The U.S. Energy Information Administration (EIA) projects that the share of renewables in the U.S. electricity generation mix will increase from 21% in 2020 to 42% in 2050. According to the EIA estimates, renewables will collectively surpass natural gas by 2030 to be the predominant source of generation. Solar is expected to surpass wind by 2040 as the largest source of renewable generation. 2/15/2021

Senate Committee Takes First Step to Repeal HB 6’s Decoupling Mechanism

This week, the Senate Energy and Public Utilities Committee voted 11-0 to approve OMA-supported Senate Bill 10, which would repeal an anti-consumer, anti-market provision of House Bill 6.

If enacted, SB 10 would rescind HB 6’s decoupling provision, which FirstEnergy’s former CEO in 2019 said would make the company “somewhat recession proof” by guaranteeing the company’s revenue at 2018’s record-setting levels ($978 million a year).

The bill would also repeal the “significantly excessive earnings” provision authorized in the last state budget (HB 166) to allow FirstEnergy to avoid consumer-protecting profitability limits and related customer refunds.

The sponsor of SB 10, Sen. Mark Romanchuk (R-Mansfield) — who is a manufacturer — told Hannah News Service that other provisions of HB 6, including its nuclear and coal price supports, are still on the table and could appear in separate repeal legislation. 2/10/2021

Senate Bill 44 Would Kill HB 6’s Nuclear Subsidies

There is other recently introduced legislation besides Senate Bill 10 (see separate story) that unwind House Bill 6. One such measure is Senate Bill 44, sponsored by Sens. Jerry Cirino (R-Kirtland) and Michael Rulli (R-Salem) to repeal HB 6’s $150 million annual nuclear generation subsidies. The bill, which received its first hearing this week, would leave intact HB 6’s $20 million in annual subsidies for select solar projects.

Gongwer News Service reported that the sponsors of SB 44 said HB 6’s subsidy payments “may be more of a liability to beneficiary Energy Harbor under ongoing and expected changes at the federal level — and that the company’s fiscal footing should be healthier given its emergence from bankruptcy a year after HB 6’s passage.” 2/10/2021

Still More Developments in the HB 6 Drama

On Feb. 5, Generation Now — a dark money group that prosecutors allege was controlled by former Ohio House Speaker Larry Householder — admitted guilt in helping orchestrate the $60 million racketeering scandal tied to the enactment of House Bill 6.

Meanwhile, there was further confirmation this week that the owner of Ohio’s two nuclear power plants — Energy Harbor, a subsidiary of FirstEnergy — is no longer interested in receiving as much as $1 billion in generation subsidies provided by the tainted energy law. The company is concerned that accepting subsidies would put it at a disadvantage when competing with non-subsidized electricity suppliers in the 13-state PJM energy market.

A federal rule blocks companies that receive state subsidies from being able to sell electricity in a market designed to provide extra energy capacity, if needed. The OMA spotlighted this issue more than a year ago. 2/9/2021