News and Analysis
On Thursday, Aug. 29, the OMA Energy Committee held its third meeting of 2019 — this time at Rockwell Automation in Mayfield Heights. Chaired by Brad Belden, president of The Belden Brick Co., the meeting featured a full agenda with updates and insight from OMA staff, as well as OMA energy counsel Kim Bojko, partner at Carpenter Lipps & Leland, and OMA energy engineer John Seryak of RunnerStone.
Much of the meeting centered on House Bill 6 — the nuclear bailout law that was passed and signed in July — and its impact on manufacturers. Other discussion included recent energy-related decisions by the Supreme Court of Ohio and the Public Utilities Commission of Ohio. Guest speakers from the U.S. Department of Energy explored best practices in energy management, while OSU economist Ned Hill and Cleveland State University’s Andrew Thomas presented their research on the economic benefits of Ohio’s deregulated electricity market.
The next meeting of OMA’s Energy Committee is set for Nov. 21 at the OMA. 8/29/2019
Nice turnout for the OMA Energy Committee meeting in Mayfield Hts. Thank you, Rockwell Automation, for the hospitality and the technology demonstrations!
The Supreme Court of Ohio this week rejected FirstEnergy’s appeal to reconsider the legality of its Distribution Modernization Rider (DMR). The denial to reopen the case confirms the court’s earlier 4-3 ruling that customers of FirstEnergy’s Ohio utilities have been overcharged by hundreds of millions of dollars since 2017. The court in June said the Public Utilities Commission of Ohio (PUCO) improperly authorized utility surcharges for grid modernization subsidies, and ordered the charges to be removed immediately.
The OMA Energy Group led the legal challenge to remove this rider. 8/22/2019
Another competitive power generation project has been cancelled due to the enactment of House Bill 6, the nuclear bailout plan. The Youngstown Vindicator this week reported on the decision by Clean Energy Future to shelve its plans to develop a third natural gas-fueled power plant in Lordstown. It is estimated the $1.1 billion plant would have brought $29 billion worth of economic benefit to the region over its 50-year life.
Approved by the General Assembly and signed into law in mid-July, HB 6 forces Ohio customers, including manufacturers, to subsidize the state’s nuclear power plants, as well as certain coal-fired generation facilities, giving those generators an unfair advantage and undercutting market economics. Last month, it was announced that a planned gas-fired power plant slated for Wood County had been cancelled due to HB 6. 8/21/2019
The OMA Energy Committee will hit the road for its Thursday, Aug. 29, meeting — this time convening in the Cleveland metro area. Rockwell Automation in Mayfield Heights will host the 10 a.m. to 1 p.m. meeting, which includes a networking lunch and optional automation demonstration tours. As always, there is no charge to attend. Register here or call (800) 662-4463. 8/22/2019
New research shows Ohio’s deregulated electricity markets have saved the state’s ratepayers nearly $24 billion over the past eight years, or roughly $3 billion a year. Conducted by researchers at The Ohio State University and Cleveland State University — and commissioned by the Northeast Ohio Public Energy Council (NOPEC) — the study shows that competition has driven down average electricity prices in deregulated Midwestern states, while their regulated peers have seen steady price increases.
Unfortunately, the research also finds that Ohio’s investor-owned utility companies are chipping away at those customer savings through the use of subsidies, surcharges, and riders. This is occurring as efforts have intensified to re-regulate electricity markets. See the whitepaper and executive summary. 8/12/2019
Why is the OMA passionate about energy policy? Because manufacturers and other industrial users account for nearly one-third of Ohio’s total energy consumption — including motor fuel and electricity. The U.S. Energy Information Administration (EIA) has posted its most recent breakdown of Ohio’s energy consumption. Key facts include:
- Ohio’s industrial sector is a major user of natural gas.
- As of April, Ohio’s average industrial electric rate was 6.26 cents/kWh compared to 6.53 cents/kWh nationally.
- Ohio is the third-largest coal-consuming state after Texas and Indiana, and nearly 90% of the coal consumed in Ohio is used for electric power generation. Nationwide, coal-fired generation continues to be retired.
As stated in the OMA’s Public Policy Competitiveness Agenda, energy policy can enhance — or hinder — Ohio’s ability to attract business investment, stimulate economic growth, and spur job creation. This is especially true in manufacturing. 8/5/2019
Last month, during the final days of legislative action on House Bill 6 — the nuclear bailout bill — 70 Ohio lawmakers from the House and Senate voted to approve the power plant subsidy package. However, another 50 lawmakers stood firm and voted against the bill. The votes were not along partisan lines and lawmakers from both parties were pressured heavily by their leadership, as well as multiple stakeholders.
This was a difficult vote, so hearing directly from constituents will mean a great deal to every lawmaker. If your state representative or senator voted “no” on HB 6, take a moment to send him/her a note of thanks. You can find your state lawmakers here. 8/5/2019
Just over a week since the nuclear bailout bill (House Bill 6) was approved by the General Assembly and signed into law, efforts are underway to ask Ohio voters to invalidate the legislation.
A group called Ohioans Against Corporate Bailouts is conducting a referendum campaign. This week, it filed initial paperwork with the Ohio Attorney General. If the petition language is approved, more than 265,000 signatures must be collected to put the issue on the November 2020 ballot. The group is not yet disclosing specific supporters of the referendum effort, but they expect many HB 6 opponents to continue voicing their concerns about the law.
Here’s more information on Ohio’s referendum process. 8/1/2019
The decision of Ohio lawmakers to subsidize nuclear and select other power plants is already negatively affecting the wholesale operation of the regionally administered power markets. Two days after Ohio enacted its nuclear bailout under HB 6, federal policymakers ordered PJM Interconnect — the nation’s largest power grid operator, whose territory includes all of Ohio — to indefinitely delay an auction to set power prices.
According to Bloomberg, “The halt lays bare the gridlock within the federal energy commission as it grapples with hundreds of millions of dollars in out-of-market subsidies that some states are creating to rescue foundering nuclear power plants.” Bloomberg notes that while some power generators have warned that state bailouts are skewing the results of auctions, the Trump administration has pressed for aid to “money-losing reactors and coal units in the name of grid resilience.”