News and Analysis
Members of Ohio’s congressional delegation are warning the Biden administration that shutting down Enbridge Line 5 — a pipeline that delivers oil and gas from Canada to the upper Midwest — could cost tens of thousands of jobs, spike energy prices, and jeopardize the region’s economy.
Michigan Gov. Gretchen Whitmer has tried to shut down the pipeline, while the pipeline’s owner has sued to keep it open. The OMA is on record in support of the pipeline remaining operational. 11/10/2021
A unanimous settlement agreement filed this week with the Public Utilities Commission of Ohio (PUCO) requires FirstEnergy’s three Ohio utilities to refund customers $306 million, including $96 million beginning 30 days after PUCO approval and $80 million next year.
The settlement agreement resolves 10 pending regulatory proceedings related to 2017-2020 annual earnings tests, a 4-year review of FirstEnergy’s electric security plan, and 2014-2018 energy efficiency audits.
The unopposed settlement agreement is supported by the OMA Energy Group among a number of other parties.
Under the agreement, FirstEnergy will refund $96 million (which includes interest) related to the utilities’ 2017-2019 annual earnings tests shortly after PUCO approval. Of that, nonresidential customers will be allocated approximately $45.3 million, dispersed as a $2.60 per megawatt hour credit over a six-month period. Additionally, FirstEnergy will refund $210 million as bill credits over a four-year period (2022-2025). The settlement agreement is subject to review and approval from PUCO commissioners.11/2/2021
In response to the PUCO-announced settlement agreement calling for FirstEnergy’s Ohio utilities to refund customers $306 million, OMA President Ryan Augsburger issued the following statement.
“The Ohio Manufacturers’ Association is proud to be a party to the unanimous settlement agreement filed with the PUCO on November 1, 2021. The settlement is a huge win for residential and business customers who have been saddled with above-market charges for years as a result of FirstEnergy’s aggressive lobbying for new charges assessed to customers’ bills through electric security plans, the interpretation of the significantly excessive earning test (SEET), and the propriety of a subsidy that the OMA was instrumental in appealing that was later found to be improper by the Supreme Court of Ohio. Sadly, in Ohio, customers rarely see refunds from utilities, so this settlement is a welcome step in the right direction. We urge the PUCO to approve the settlement.” 11/2/2021
Cincinnati Mayor John Cranley, a Democratic candidate for governor, held a press conference this week to announce his plans to fire Ohio’s entire utility regulatory board if elected to cleanse cap square from FirstEnergy and the HB 6 corruption scandal. He would vet replacements, screening for conflicts of interest and relevant experience. 11/4/2021
The last scheduled OMA Energy Committee meeting of the year is Thursday, November 11. In addition to a Zoom option, there is an option to attend in person at the OMA offices followed by a networking lunch. Agenda items include:
- Special guest PUCO Chair Jenifer French;
- A presentation on energy infrastructure and cybersecurity by OMA Connections Partner DT Midstream;
- Winter is coming on and with natural gas prices rising, our experts will break down the outlook for both gas and electricity pricing.
All members are welcome. Register here. 11/4/2021
The U.S. Energy Information Administration (EIA) has published its winter fuels outlook, which notes that retail prices for energy are at or near multi-year highs. For households, the EIA forecasts propane bills to increase an average of 54%, natural gas about 30%, and electricity about 6%. Propane and natural gas inventories — which are already lower than normal — could fall to record lows. (Here’s the short-term outlook for energy prices by region.)
This week, a group of Ohio’s utilities that collectively own the Ohio Valley Electric Corporation (OVEC) testified against House Bill 351, which would repeal an HB 6-related subsidy for two unprofitable Cold War-era coal plants — one of which is in Indiana.
The group defended the customer-funded subsidy, calling it a potential “hedge” against higher natural gas prices, even as the financial burden on ratepayers has ballooned to $150 million per year. The utilities defended the subsidy as needed insurance for customers. To date, no ratepayer refund has been provided through the OVEC subsidy. The OMA continues to spearhead efforts to end this HB 6 giveaway. 10/28/2021
This year will yield the first year-over-year increase in coal-fired electricity generation in the U.S. since 2014, according to the Energy Information Administration (EIA). Coal-powered generation is projected to rise by 22% over 2020 levels due to higher natural gas prices. Despite this, the EIA forecasts U.S. coal-fired generation will decline about 5% next year due to continued retirements of coal power plants and lower natural gas prices. 10/19/2021
Last week, members of the Ohio House introduced House Bill 450, legislation that would permit community solar in the territories of the electric distribution utilities (EDUs). To date, community solar has not been available in EDU territories due to the inability for customers to participate in aggregate or virtual net metering. For details, see this insight from OMA general counsel Bricker & Eckler. 10/21/2021
On the heels of a recent AP article, Ohio’s customer-funded subsidy for two coal-fired power plants (one of which is in Indiana) continues to garner media attention. Cleveland.com (subscription) has highlighted the mounting expenses triggered by a House Bill 6 provision to help fund Ohio Valley Electric Corporation (OVEC), which is comprised of more than a dozen utility companies.
The article cites a recent OMA-supported study that found the OVEC subsidy could cost Ohioans a total of $1.8 billion by 2030. While AEP, Duke, and AES Ohio customers have been funding the subsidy for years, HB 6 mandated that “FirstEnergy customers had to begin paying subsidies for the plants.” 10/11/2021