News and Analysis
Energy Prices at Multi-Year Highs Heading Into Winter
October 29, 2021The 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.)
Meanwhile, experts say a cold winter could send oil prices to $100 a barrel. This as news wires are publishing ominous photos of gasoline lines from the 1970s. 10/27/2021
Ohio Utilities Testify to Keep Their OVEC Subsidy
October 29, 2021This 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
Coal-Fired Power Use Grows for First Time Since 2014
October 22, 2021This 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
Ohio House Introduces Community Solar Legislation
October 22, 2021Last 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
Scrutiny of OVEC Subsidy Continues
October 15, 2021On 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
OMA Joins Effort to Support Competitive Transmission
October 15, 2021The OMA this week joined more than 70 consumer organizations representing manufacturing companies and residential consumers to urge the Federal Energy Regulatory Commission (FERC) to ensure that new electricity transmission projects are competitively bid and ratepayer cost increases are reduced.
FERC, which oversees the U.S. bulk power system, has initiated an advance notice of proposed rulemaking that considers the potential need to improve how transmission lines are planned and paid for. According to the Electricity Transmission Competition Coalition, annual transmission spending in the U.S. has increased from $95 billion in 2014 to $170 billion in 2020 — a 79% increase — while electricity demand increased only 2.3%. Only about 3% of electric transmission projects face competition. 10/14/2021
Study: Ohio No. 25 for Energy Efficiency
October 15, 2021The Buckeye State ranks 25th when it comes to energy efficiency, according to a new comparison by personal finance website WalletHub.com. The site measured the efficiency of auto- and home-energy consumption in the 48 contiguous states. 10/12/2021
Report: No Plan to Protect Ohio Customers From Growing Transmission Charges
October 8, 2021The OMA Energy Group (OMAEG) has worked hard to contain transmission charges — one of three major components on power bills, along with generation and distribution. The OMAEG contends that applications for new transmission charges are not being adequately scrutinized by regulators, resulting in customer cost increases without corresponding benefits. Multiple consumer groups have supported the OMAEG’s efforts on this issue.
The OMAEG proposes that the Ohio Power Siting Board provide greater oversight of charges for supplemental transmission projects. Despite these concerns, the Board recently issued a draft report warning against increased oversight that could significantly reduce costs while maintaining reliability. Not surprisingly, transmission owners generally agree with that position, according to a report by Hannah News Service. 10/7/2021
PUCO Requested Utility-Friendly Edits to Audit Report
October 8, 2021Emails obtained via a public records request show staff at the Public Utilities Commission of Ohio (PUCO) directed an independent auditor to tone down its initial criticism of customer-funded subsidies for two coal-fired power plants owned by the Ohio Valley Electric Corp. (OVEC).
According to reports, the auditor — who was hired to examine the OVEC subsidies, which are directly tied to the scandal-ridden House Bill 6 — originally stated that “keeping the plants running does not seem to be in the best interests of ratepayers” and “the OVEC contract overall is not in the best interest of AEP Ohio ratepayers.” At the time, the PUCO was headed by former Chair Sam Randazzo, who later resigned due to his apparent ties to the HB 6 scandal. The final audit report contains a much milder tone.
The OMA remains committed to the repeal of these subsidies, which were forced on Ohio manufacturers. 10/7/2021
Industrial Use of Natural Gas Could Soon Break 50-Year-Old Records
October 8, 2021Based on the U.S. Energy Information Administration’s (EIA) September outlook, U.S. industrial sector natural gas consumption is expected to rise throughout 2021 and exceed pre-pandemic 2019 levels. The EIA forecasts the growth to continue into 2022, nearing or breaking annual industrial natural gas consumption records set in the early 1970s. 10/5/2021