News and Analysis
Total investment in Ohio’s resource-rich shale energy sector has reached $78 billion since tracking began in 2011, according to a Cleveland State University study. Prepared for JobsOhio, the report represents the most recent data available and covers investments through the second half of 2018.
Estimates show that by 2040, the Utica and Marcellus shale region — of which Ohio is a significant part — will supply nearly half of all U.S. natural gas production. 11/20/2019
A new report from the U.S. Energy Information Administration finds the U.S. in 2018 set new records in natural gas production, consumption and exports. The country’s natural gas consumption increased by 11% in 2018, driven by increased demand by the electric power sector. Pennsylvania and Ohio — states that overlie the Appalachian Basin — had the first- and third-largest year-over-year production increases for 2018. 11/18/2019
Lazard, one of the world’s top financial advisory and asset management firms, has released its annual report on the levelized cost of electricity — based on type of generation. The report shows some unsubsidized renewable costs are approaching the pricing of traditional generation. It also shows that nuclear power remains a competitive energy generation source ($27-$31 per MWh) compared to both renewables and natural gas combined cycle generation. 11/13/2019
Consistent with recent media statements, Ohio Senate Energy and Public Utilities Committee Chairman Steve Wilson (R-Maineville) announced this week that informational testimony on energy reliability will commence Dec. 10 as part of the Senate’s work on “comprehensive” energy policy.
Studies and expert insight dispel the notion that Ohio has a reliability problem. To the contrary, because of market-based generation, Ohio enjoys record high reserves of electric generation, which lesson the threat of shortages and price spikes. 11/14/2019
During an investor call this week, FirstEnergy CEO Chuck Jones announced the distribution utility would file a decoupling application with the PUCO as permitted by the recently enacted House Bill 6. Ohio’s other electric utilities could follow suit later this month.
Decoupling allows a utility to fully recover investments and operating costs at 2018 levels even if sales decline due to customer efficiency improvements. Gongwer News reported that the FirstEnergy CEO touted the decoupling rider for making the monopoly “recession proof.”
According to an OMA analysis of HB 6, the nuclear bailout bill includes provisions that will impose new costs on customers, among them the new decoupling rider. Currently, FirstEnergy recovers part of its distribution costs through its energy efficiency rider, which is going away under HB 6. As a result, FirstEnergy claims it cannot recover its entire distribution costs, and that the decoupling mechanism is necessary to recover costs formerly captured by the terminated energy efficiency charge. Captive customers will be required to pay the utility to make it whole from the loss of energy efficiency profits. Many larger industrial customers have already opted-out of the energy efficiency rider, so the decoupling rider will constitute a new cost to those customers.
Make no mistake, this is another utility profit scheme that comes at customers’ expense. This topic will be discussed at the Nov. 21 OMA Energy Committee meeting. Support ongoing energy advocacy by joining the OMA Energy Group. 11/7/2019
In mid-October, the Ohio Power Siting Board deviated from its standard practice by denying final approval of a larger, 80-megawatt solar project planned for southern Ohio. The board, which must approve any new commercial power generation facility — traditionally OKs new generation facilities that have been advanced to this stage.
The move has alarmed renewable energy developers and clean energy advocates. Moreover, it raises questions about how Ohio’s siting process will work going forward. Billions of dollars are being invested by businesses to develop new gas and renewable power generation in Ohio. 11/7/2019
As fallout from the failed referendum effort to overturn Ohio’s nuclear subsidy law (HB 6), customers and developers of new power plants seem to be the target of political retribution. This week, the sponsors of a proposed constitutional amendment presented testimony in support of House Joint Resolution 2. The measure would place an amendment to Ohio’s constitution on the statewide ballot, enabling Ohioans to cast a vote to bar foreign interests from controlling “critical energy infrastructure” in Ohio.
In their testimony, the resolution’s sponsors — State Reps. Don Manning (R-New Middletown) and Jamie Callender (R-Concord Township) invoked language reminiscent of McCarthyism and the Red Scare. The proposal is extremely troubling on a policy level. If approved, it could have dire consequences for power customers and Ohio’s economy. It also establishes a precedent of prohibiting foreign investment of business in Ohio.
Read this overview of the resolution prepared by OMA general counsel at Bricker & Eckler. 10/31/2019
The Ohio House Energy and Natural Resources Committee this week held a third hearing on House Bill 104. The legislation is intended to spur the development of molten salt reactor (thorium) power generation by creating a public-private partnership and a for-profit lobbying company to advance policy aimed at attracting research and development of the presently unviable technology. Under HB 104, the state-supported entities would be given eminent domain authority to seize private property to site new nuclear waste disposal sites in Ohio.
Last week, a series of proponents appeared to testify in favor of the bill. The OMA has not yet provided testimony. However, the OMA’s Ryan Augsburger wrote the bill’s primary sponsor Rep. Dick Stein (R-Norwalk) this week to express concerns. The bill will be discussed at the Nov. 21 OMA Energy Committee meeting. 10/31/2019
Earlier this week, the controversial House Bill 6 became effective — 90 days after Gov. Mike DeWine signed the bill into law.
Some opponents of the bill proposed a referendum to overturn the law, but that effort appears to have bottomed out. The referendum committee Ohioans Against Corporate Bailouts failed to obtain the needed number of signatures to place the matter on the November 2020 ballot. In a Hail Mary effort, the committee asked a federal court for more time to gather signatures, but the request was denied.
Now the work of implementing HB 6 is underway. The OMA is participating in the proceedings conducted by state agencies responsible for implementing the law. HB 6 will drive new costs for manufacturers to benefit select generators and utilities. The new clean air costs will not hit customer bills until 2021; however, all customers will begin seeing new charges the first of the year to bail out the two coal power plants owned by OVEC. 10/24/2019
The bill is supported by Ohio’s four electric distribution monopoly utilities, which would gain entry into generation, services, and products that are presently off limits to distribution utilities. Moreover, the bill would allow utilities to charge captive customers more money to build out unnecessary infrastructure — all while generally removing many customer protections, especially with regards to corporate separation.
HB 247 comes on the heels of the enactment of the anti-market HB 6, supported by a majority of Republican leaders. A vote on HB 247 is likely later this year. The bill will be discussed at the Nov. 13 OMA Government Affairs Committee meeting, as well as the Nov. 21 Energy Committee meeting. 10/24/2019