News and Analysis
By choosing the right person to fill an upcoming vacancy at the Public Utility Commission of Ohio (PUCO), Gov. Mike DeWine can help control rising energy costs facing Ohioans and Ohio businesses, according to a Jan. 25 editorial by OMA President Ryan Augsburger. The piece was published by the Ohio Capital Journal.
This week, the public corruption trial of former Ohio House Speaker Larry Householder and former FirstEnergy lobbyist Matt Borges got underway in Cincinnati. Householder is accused of receiving $61 million in bribes in exchange for passing House Bill 6, often referred to as the $1 billion nuclear bailout bill.
Opposed by the OMA after its introduction in April 2019, HB 6 was more than just a ratepayer-funded bailout of two nuclear plants. It also included:
- Customer-funded subsidies for two coal-fired power plants (one in Indiana) owned by the Ohio Valley Electric Corporation (OVEC), which is comprised of more than a dozen utility companies. The subsidy, which is still in effect, could cost Ohio customers $1.8 billion by 2030, according to an OMA study. Customers have already paid roughly $190 million, according to this counter.
- HB 6’s decoupling mechanism, which allowed FirstEnergy to guarantee itself revenue, was repealed by House Bill 128 in 2021. The provision would have increased some Ohioans’ electricity bills by $85 million annually. Some decoupling refunds have been issued, as required by HB 128.
- HB 6’s “significantly excessive earnings test” (SEET) shielded FirstEnergy from up to $50 million in customer refunds owed for 2017-2019. The SEET provision was also repealed by HB 128. The OMA was a party to a $306 million settlement in 2021 that was partly based on the PUCO’s interpretation of the SEET.
See this timeline of HB 6 and the events leading up to the Householder case, published by the Statehouse News Bureau. 1/26/2023
- Natural gas output from Ohio’s Utica and Marcellus shale regions rose just over 1% in Q3 2022, but was still less than the production levels for Q3 2019 and 2021.
- Ohio Consumers’ Counsel (OCC) Bruce Weston has announced his retirement after 45 years with the agency, including more than a decade in the top post.
- The PUCO has OK’d a $68.2 million rate hike for Columbia Gas of Ohio — much less than the company’s first proposal calling for a $221.4 million increase. (The OMA Energy Group worked to reduce the proposed hike.)
- Based on new estimates, wind and solar will account for 16% of total U.S. power generation in 2023, up from 14% last year and 8% in 2018.
- A spike in wind turbine malfunctions could negatively affect the push for more renewables, Bloomberg reports.
Lastly, the Columbus Metropolitan Club recently hosted a panel of experts addressing how utility corruption hurts ratepayers. Watch the recorded discussion. 1/26/2023
- The trial of former Ohio House Speaker Larry Householder is set to begin next week in Cincinnati. The Enquirer has published this look at U.S. District Court Judge Timothy Black, who will oversee the trial, which could last six weeks.
- Reports note that the public will soon learn how and why FirstEnergy paid $60 million to Generation Now, the non-profit that has been linked to Ohio’s House Bill 6 scandal.
- The Supreme Court of Ohio has agreed to take up an HB 6-related dispute over the freezing of $8 million in assets belonging to a former PUCO Chair Sam Randazzo.
- An ethics reform plan floated by a group of Ohio House Republicans would require PUCO nominees to disclose their income, previous business relationships, and ties to regulated entities.
- The U.S. Department of Energy is offering $52 million in funding for clean manufacturing R&D focused on three areas, including energy technology manufacturing.
- This infographic published by Visual Capitalist shows the largest source of electric generation in every state and Canadian province.
- Oil demand is looking http://vmore robust in 2023 than originally expected, due to higher demand from China as its economy reopens, reports say.
- Even with this week’s uptick, U.S. natural gas prices remain much lower than they were last year.
- PJM Interconnection says an “unacceptable” number of generation outages resulted in the loss of electricity just before Christmas as well as requests for conservation in several states, including Ohio.
Meanwhile, with more large companies like GM, Ford, and Google expressing interest in “virtual power plants,” Reuters has posted a short video explaining this technology that aims to help avoid electric power outages. 1/19/2023
- A study by the U.S. Department of Energy shows Ohio will be among seven states that will be critical for electric vehicle battery manufacturing by 2030.
- Gov. Mike DeWine has signed House Bill 507 to designate natural gas as green energy and open more state land to energy production. (Meanwhile, New York’s governor has proposed to ban natural gas in new buildings.)
- PUCO Commissioner Beth Trombold has announced her resignation, effective Feb. 10. Here is who has applied for the upcoming vacancy.
- A survey of state policies shows Ohio, under House Bill 6, has the least stringent clean energy requirements of any state, reports say.
- Utility corruption questions linger as former Speaker Larry Householder’s HB 6-related trial is set to begin later this month, according to the Energy News Network.
- High electricity rates are expected in northeast Ohio this summer due to high wholesale auction prices, the Plain Dealer reports.
- Major companies, including GM and Ford, say they will work together to establish standards for scaling up “virtual power plants” to help ease loads on the grid.
Meanwhile, the Energy Information Administration has published this infographic examining recent wholesale electricity price trends by region. 1/12/2023
Any state plan for electric vehicle (EV) recharging infrastructure must be market driven. That’s the main point of a Jan. 8 editorial by Lindsey Short — the OMA’s director of public policy services — and published by The Vindicator (Youngstown) and Tribune Chronicle (Warren).
Short says state policymakers — including the Mahoning Valley’s Sen. Michael Rulli (R-Salem) — are looking at ways to ensure Ohio remains a global leader in EV manufacturing. As they continue to develop policy, lawmakers must avoid providing subsidies to electric utilities to build and own EV-charging infrastructure, she writes, since doing so would drive off competition and hurt electricity customers. 1/9/2023
AEP Ohio recently applied to the Public Utilities Commission of Ohio (PUCO) for a new electric security plan. Gongwer reports the six-year plan would cost electricity customers $2.2 billion through a distribution investment charge. The new revenue would be used for reliability projects, expanding internet access, and broadening AEP’s electric vehicle program.
The OMA Energy Group (OMAEG) has studied AEP’s application and estimates the entire plan will cost customers closer to $4 billion. The OMAEG is considering options to challenge the excessive proposed rate increase. After AEP’s plan has been reviewed by the PUCO, it will be subject to appeal to the Supreme Court of Ohio. The PUCO will hold public hearings on the proposal before making a decision. 1/9/2023
The New York Times recently published this story, which seems to blame deregulation for increased electricity prices in several states. The story focuses largely on California’s experience and transmission costs.
Debating whether competitive electric power markets are preferred over regulated monopolies is a long-running argument in policy circles. Not too long ago, academic experts from the University of California, Berkley were offering rebuttals to attacks on deregulation.
In recent years, Cleveland State University researchers have shown Ohio’s competitive electricity markets save customers billions of dollars every year, while researchers at The Ohio State University have shown new regulated costs can offset the market savings from deregulation. 1/9/2023
- The performance of the electric grid in Ohio and other states during December’s cold spell has spurred an investigation by the Federal Energy Regulatory Commission (FERC). On Christmas Eve, about 1.6 million U.S. customers were without power.
- Even one of the healthiest regional grids — that of Duke Energy and the Tennessee Valley Authority — struggled during the recent winter blast, reports say.
- FERC has withdrawn the electric transmission billing “adder” it had earlier awarded to AEP, providing some relief to AEP transmission customers in Ohio.
- FirstEnergy failed to disclose nearly $94 million in lobbying in its support of the scandal-plagued House Bill 6 and has agreed to pay a related $3.9 million fine, reports say.
Meanwhile, Russia’s war in Ukraine has sparked $500 billion in new spending for clean energy, according to the International Energy Agency. 1/5/2023
The Public Utility Commission of Ohio (PUCO) has issued a report on a series of power outages last summer in the hours following a strong thunderstorm. The OMA was among the organizations calling for an investigation.
This story by the Ohio Capital Journal notes that PUCO’s report criticizes AEP Ohio’s preparation for the event and its customer communications. While the report “largely gives the company a pass,” PUCO staff did take aim at AEP’s tree-trimming program. 1/4/2023