News and Analysis
OMA Calls for HB 6 Repeal, Reform
November 13, 2020This week, the OMA called on Ohio lawmakers to quickly pass House Bill 772, legislation that would repeal and reform harmful provisions of House Bill 6 — the state’s nuclear subsidy law — in a manner that protects customers and markets. The OMA is part of a customer coalition that supports the enactment of HB 772. Read the OMA’s press release.
The sponsor of HB 772, Rep. Mark Romanchuk (R-Ontario), this week testified before the Senate Energy and Public Utilities Committee in support of the legislation. His testimony included this analysis by the Legislative Services Commission showing HB 772 would save Ohioans nearly $3 billion over the next decade by slashing ratepayer-funded subsidies to electricity companies. (Here is the bill’s full text.)
There remains no clear timeline for HB 6 action in either chamber, although Senate President Larry Obhof (R-Medina), Speaker Bob Cupp (R-Lima), and Gov. Mike DeWine have listed it as a lame duck priority. 11/11/2020
HB 6’s OVEC Subsidies: Bailing Out a Sinking Ship
November 13, 2020Among its numerous flaws, House Bill 6 created a generous, ratepayer-funded subsidy for the Ohio Valley Electric Corporation (OVEC) and its two 1950s-era coal power plants – one in Ohio and one in Indiana.
As explained in this memo, authored by OMA’s energy engineering consultants John Seryak and Peter Worley of RunnerStone LLC, the OVEC coal plants have been selling electricity for less than it costs to generate for nearly a decade. Under HB 6, Ohioans will be forced to continue to subsidize these uneconomical plants through 2030 to the tune of an estimated $700 million. Because OVEC has a power agreement and debt through 2040, OVEC owners will likely seek more subsidies in 2030.
Meanwhile, OVEC estimates its energy output this year will be 39% less than in 2010, adding to the reasons why HB 6 needs to be repealed and replaced with market-oriented, competitive energy policy. 11/10/2020
PUCO Initiates FirstEnergy Audit
November 6, 2020This week, the Public Utilities Commission of Ohio (PUCO) initiated an audit of FirstEnergy’s compliance with corporate separation laws and regulations. The action by the PUCO comes after the agency has been petitioned and criticized for not investigating wrongdoing by the regulated monopoly utility company, FirstEnergy, referred to as “Company A” in the federal prosecution against Larry Householder for its role in HB 6.
In the wake of guilty pleas entered by two of the accused conspirators last week, FirstEnergy fired its CEO and other executives. FirstEnergy’s board said that the executives had violated company policies and its code of conduct. With that admission, the PUCO initiated the audit of FirstEnergy.
Meanwhile eyes are on the post-election or lame duck legislative session that will soon convene for a month or so. Late last week, Senate President Larry Obhof told the Columbus Dispatch (subscription) that the Senate will hold informal hearings on House Bill 772 (Romanchuk) to repeal HB 6. 11/5/2020
Guilty Pleas in HB 6 Corruption Case; FirstEnergy Fires CEO Chuck Jones
October 30, 2020The fallout continues from the House Bill 6 scandal.
On Thursday, Oct. 29, U.S. District Court Judge Timothy Black accepted guilty pleas from two of the individuals facing federal racketeering charges alongside former Ohio House Speaker Larry Householder (R-Glenville). Hours later, FirstEnergy Corp. announced it had terminated CEO Charles E. Jones Jr. and two senior vice presidents for violating company policies and its code of conduct.
As reported at Cleveland.com, Juan Cespedes, a former lobbyist for FirstEnergy, and Jeffrey Longstreth, a longtime campaign and political strategist for Householder, admitted they took part in a “massive pay-to-play scandal” tied to the nuclear subsidy law and a subsequent referendum campaign. Federal authorities allege the scheme involved more than $60 million in bribes to Householder and a handful of allies.
The Statehouse News Bureau writes that the guilty pleas mean the defendants have “reached a deal with federal prosecutors.” U.S. Attorney David DeVillers says the “investigation remains ongoing.”10/29/2020
Utility-Scale Battery Storage Costs Fell Nearly 70% in Recent Years
October 30, 2020The ability to store electricity — and do so in a way that’s affordable — is critical to expanding the use of renewable energy. So it’s worth noting the U.S. Energy Information Administration has reported that the average energy capacity cost of utility-scale battery storage in the U.S. fell from $2,152 per kilowatt hour (kWh) in 2015 to $625 per kWh in 2018 — a nearly 70% decrease. 10/28/2020
Analysis: Markets Prepare for Possible Changes to Renewable Energy Policies
October 30, 2020The prospect of a Joe Biden victory on Election Day has spurred a rise in renewable energy stocks, according to OMA Connections Partner RSM. The firm writes: “By contrast, returns for oil and gas producers are down for the year, not only because of weaker demand that followed the economic slowdown, but also because of the prospect of regulatory headwinds for fossil fuels under a new administration.” 10/28/2020
Crain’s: Ohio Can’t Allow HB 6 to Stand
October 23, 2020Crain’s Cleveland Business has weighed in on repeal of House Bill 6. The paper writes: “Allowing this bill to stand sends an unmistakable signal that corruption is tolerated, at least when crafting an alternative to the result of the corruption is hard. … The Legislature loses credibility by the day as it lets HB 6 stand.”
The editorial signals support for House Bill 772, which would, among other things, “repeal the nuclear, solar, and coal subsidies included in HB 6” while preserving other parts of the legislation, including ending green energy standards. For a brief backgrounder on HB 772 and why it has OMA’s support, see the OMA’s summary. 10/19/2020
Another Week of No Hearings on HB 6 Repeal
October 16, 2020More than 12 weeks have passed since federal agents arrested then-House Speaker Larry Householder (R-Glenford) for his ties to the alleged a $60 million conspiracy to pass House Bill 6.
And in just 75 days — on Jan. 1 — Ohioans will be forced to start paying for HB 6’s subsidies via their electric bills, costing ratepayers $170 million annually.
Fortunately, House Bill 772 has been offered by Rep. Mark Romanchuk (R-Ontario) to repeal and reform provisions of Ohio’s energy law that have been negatively impacted by HB 6. (The OMA has produced this two-page document to summarize HB 772 and why it’s needed.) But the House Select Committee on Energy Policy and Oversight, which is considering HB 6 repeal options, has not held a hearing since Sept. 30.
As this Cleveland.com editorial indicates, calls for the General Assembly to act are growing louder. Gov. Mike DeWine this week said he thinks Ohio lawmakers will pass some type of repeal legislation after the Nov. 3 election. This will be a key topic of discussion at the OMA’s Government Affairs Committee meeting on Nov. 10. 10/15/2020
Romanchuk Briefs OMA Members on HB 6 Repeal and Reform Legislation
October 9, 2020This week, Rep. Mark Romanchuk (R-Ontario) addressed a joint meeting of the OMA’s Government Affairs Committee and Energy Committee. Romanchuck briefed members on House Bill 772, legislation he has introduced to repeal and reform provisions of Ohio’s energy law that have been negatively affected by what he called “the HB 6 debacle.”
OMA staff has produced this two-page document to summarize HB 772 and why it’s needed.
According to Rep. Romanchuk, Ohio has continued to subsidize electric generation despite the enactment of deregulation legislation (SB 3) more than two decades ago. He said Ohio needs to return to market-driven energy policy. OMA staff stressed that a strong, unified manufacturing coalition will be needed to pass HB 772. 10/7/2020
Ohio to Lose Two More Coal-Fired Generation Plants
October 9, 2020Ohio will be down to nine coal-fired plants — providing 9,000 megawatts (MW) of generation — after Texas-based Vistra Energy, an OMA Connections Partner, shutters two power stations near Cincinnati in the next six years.
Hannah News Service (subscription) reported this week that “the state will lose more than 2,500 MW at the Miami Fort and W.H. Zimmer coal plants with the company’s continued transition from high-carbon technologies to gas-fired and renewable sources.”
The coal plants “remain economically challenged,” Vistra said, noting that the retirements reflect the major technology investments that would be required to comply with federal environmental regulations. 10/6/2020