News and Analysis
To FERC: Reject DOE Secretary Perry’s Utility Subsidy Proposal
November 3, 2017Scores of advocates filed comment with the Federal Energy Regulatory Commission (FERC) to oppose a proposed federal rule that would subsidize unprofitable nuclear power plants and some coal power plants. The rule was proposed by U.S. Energy Secretary Rick Perry earlier this fall.
Electrical grid operators and regulators including PJM Interconnection and the Public Utilities Commission of Ohio (PUCO) filed comment opposing the proposed rule for it distortion of markets. PJM’s comments describe a disproportionate effect on customers in the PJM region, which includes Ohio.
Cn behalf of its members, the OMA Energy Group filed comment opposing the rule-making.
These other consumer coalitions also filed comments in opposition: American Manufacturers & Large Institutional Customers and ELCON et al.
Several FERC experts have publicly taken a dim view of the rule proposal as just the latest attempt by some utility companies to prop up their revenues in the wake of competitive generation markets which are saving customers billions of dollars annually.
Energy-intensive manufacturers are invited to join the OMA Energy Group to protect your interests. 11/2/2017
DOE Grid Resiliency Pricing Rule Faces Lots of Opposition
October 27, 2017A recently filed grid resiliency rule proposal from the U.S. Department of Energy has brought out a storm of opposition from a wide range of groups, including the Ohio Public Utilities Commssion of Ohio (PUCO), PJM, consumers groups (including the OMA), natural gas generators, and even some coal interests.
The rule would effectly require subsidies for coal and nuclear generators. By doing so, it would blow up the functioning electricity markets and raise prices on consumers significantly, according to the rule’s critics.
Read a summary prepared for the OMA Energy Group. 10/25/2017
Efficiency Project Rebates Available in AEP Ohio Territory
October 27, 2017OMA’s energy engineering partner, Go Sustainable Energy, recently secured $300,000 in rebates on behalf of Ohio manufacturers in AEP Ohio’s Bid4Efficiency auction.
AEP Ohio holds the annual auction to create incentives for customer energy efficiency projects.
Rebates awarded by the program are eligible to exceed AEP’s $25,000 rebate cap. Projects will be compensated at $0.029/kWh saved or at $0.149/W for lighting projects.
If you have a facility in AEP territory and you are completing or planning an efficiency project in 2018, contact John Seryak to learn more. Funding will be available to OMA members on a first-come, first-served basis. 10/26/2017
A Rebuttal of False and Misleading Utility Claims
October 20, 2017This week the OMA, together with a broad coalition of partners, produced an extensive rebuttal of false and misleading claims being made by Ohio electric utilities regarding HB 239, another massive subsidy proposal for two old, uneconomic generating plants, one in Ohio and one in Indiana. Yes, Indiana. The plants are jointly owned by several utilities through the Ohio Valley Electric Corporation (OVEC).
“Several false and misleading claims about the legislation have been fabricated and reinforced by the utilities in an attempt to convince legislators to provide the OVEC plants with above-market subsidies on the backs of Ohio ratepayers,” writes the coalition.
“These are clear and true facts: The utilities want a subsidy to operate and maintain uneconomic OVEC power plants … If approved, the legislation would not be the utilities’ first consumer-paid subsidy. Ohio’s investor-owned utilities received at least $9.2 billion in “stranded assets” and “regulatory transition” payments from 2000 to 2010. The proposed OVEC legislation is bad for customers, bad for competitive markets, and bad for Ohio.” 10/19/2017
Nuclear Bailout, Part 2
October 20, 2017Last week a group of 16 lawmakers introduced a new version of legislation to bailout the unprofitable nuclear power plants presently owned by an affiliate of FirstEnergy. The proposed bailout is marketed under the term ZEN for Zero Emission Nuclear credits.
House Bill 381 alters the state’s energy policy by establishing a preference for nuclear generation over other fuel sources, such as natural gas or coal. The bill seeks to take advantage of a national question raised by the U.S. Department of Energy about fuel-diversity.
According to an analysis prepared for members of the OMA Energy Group, the new bill would cost a small manufacturer an above-market charge of $60,000, while a large manufacturer would pay $504,000, over the course of the proposed ZEN program. The structure of the subsidies is particularly punishing to small and medium manufacturers. 10/19/2017
OMA Appeals New FirstEnergy Rider to Supreme Court
October 20, 2017Just over one year ago, the PUCO approved a new credit support rider called the “distribution modernization rider” that will cost manufacturers in the FirstEnergy service territory an additional annual charge ranging between $3,700 to $3.7 million based on a company’s electricity usage.
The new above-market charge is unrelated to distribution service and offers no offsetting customer benefit. The OMA Energy Group opposed the rider throughout the PUCO process. The charge hit customer bills in January.
“This week, we appealed the PUCO decision to the Ohio Supreme Court,” reported OMA’s Ryan Augsburger. “The credit support rider approved by the PUCO one year ago is unlawful and is merely an instrument to prop up the affiliate company, FirstEnergy Solutions. It is apparent to our members that this rider is just another above-market charge that customers are forced to pay to subsidize an unprofitable and unregulated power generation company. The rider will increase customer’s power costs, jeopardizing Ohio’s manufacturing competitiveness.” 10/19/2017
PJM Market Monitor: Protect Electricity Markets
October 20, 2017“The best electric industry structure is the one that results in the lowest possible costs to customers. The best wholesale power market structure is a competitive structure that includes a competitive energy, ancillary services and capacity market,” says Dr. Joe Bowring, the independent auditor for PJM Interconnection.
Comparing merchant generators to utility generators, he notes: “Merchant generators put private capital at risk, enter the market when it appears profitable and exit the market when it is not profitable. The decisions are made entirely by private investors and the consequences are borne entirely by private investors. Customer funds are not used to fund the construction of merchant generation units and customer funds are not used to guarantee rates of return to investors when units underperform.”
Ohio electricity consumers are under siege from subsidy-seeking monopoly utilities. Bowring cautions: “Subsidies, particularly for mature technologies, result in customers paying more than they would pay without subsidies.” 10/19/2017
Poll Shows Ohioans Oppose FirstEnergy Nuclear Subsidy
October 13, 2017API Ohio last week released a new poll finding that a majority of voters in Summit, Lake and Ottawa counties oppose legislation that would allow FirstEnergy to charge its customers a special fee to support its Ohio Davis-Besse and Perry nuclear plants.
API Ohio is a division of API, which represents all segments of America’s oil and natural gas industry.
API Ohio Executive Director Chris Zeigler said, ” … We do not oppose nuclear power. What we oppose are legislative schemes that subsidize one form of energy over another, and create an uneven playing field that costs consumers, hurts manufacturers and threatens the state’s economy.”
According to API, poll results include:
- 81% of voters agree that Ohio consumers should not have to pay a special fee to bailout FirstEnergy’s nuclear power plants.
- 70% of voters agree that the Ohio electricity market should be based on the marketplace, and not on whether the state government allows one particular corporation to charge its customers more to sustain its electric power generation.
601 Ohio registered voters in Lake County, Summit County and Ottawa County were polled. 10/12/2017
Meanwhile, Another Nuke Bailout Bill Emerges
October 13, 2017Lawmakers in Columbus have been considering legislation to prop up FirstEnergy’s affiliate that owns a fleet of nuclear power plants. The power plants’ profitability has diminished as newer, efficient natural gas-fueled power plants come online. The proposed law would impose a new energy rider on all residential and business customers in FirstEnergy service territories.
The original bill has stalled; however, a revised proposal was introduced anew this week by Rep. Anthony DeVitis (R-Green) and co-sponsored by 15 other state representatives.
House Bill 381 calls for the new rider to be paid by customers until at least 2030. The OMA was an opponent of the prior version of the bill. Needless to say: more to come. 10/12/2017
Utility Subsidy Bill Could Advance Next Week
October 6, 2017This week members of the House Public Utilities Committee again considered an electric utility subsidy, House Bill 239, which would require Ohioans to pay a new tax on monthly power bills to subsidize the owners of the Ohio Valley Electric Corporation (OVEC).
AEP Ohio has the largest ownership stake in OVEC and would get the biggest subsidy. The utility testified in support of the bill this week.
The bill would force Ohio customers to prop up the finances of the Kyger Creek power plant near Gallipolis, Ohio, and the Clifty Creek power plant in Madison, Indiana. The OMA and other business groups sent a strong letter opposing the bill. Competitive power suppliers oppose the bill as do residential advocates including AARP.
A vote is likely next Tuesday. Concerned manufacturers are encouraged to call members of the House Public Utilities Committee to ask them to oppose the bill. 10/5/2017