Energy Management

Romanchuk Introduces HB 6 Repeal and Reform Bill

This week, Rep. Mark Romanchuk (R-Ontario) introduced House Bill 772 to repeal and reform provisions of Ohio’s energy law that have been altered by House Bill 6.

HB 772 differs from the so-called “straight repeal” bills in that Rep. Romanchuk’s legislation would reverse the law on new customer costs imposed by HB 6, including subsidies for nuclear power plants, old coal plants, and subsidized profits for FirstEnergy. HB 772 appears to line up with the four suggested elements for repeal and reform as outlined by the OMA in testimony last week.

The OMA will be studying the bill in detail and will share analysis next week. Stay tuned. 10/1/2020

Urgency of HB 6 Repeal Fades

This week, the House Select Committee on Energy Policy and Oversight conducted its fourth hearing on a pair of House Bill 6 repeal bills (HB 738 and HB 746). Afterward, Chairman Jim Hoops (R-Napoleon) told Statehouse news media that the committee’s exact schedule remains undetermined. He added that “whether the two nuclear plants need the financial support remains a key question.”

Meanwhile, only 90 days remain until Jan. 1, when Ohioans start funding HB 6’s nuclear subsidies via their electric bills. 10/1/2020

Comparing Utility Bills From Akron to Zanesville

The Ohio Public Utilities Commission of Ohio (PUCO) has published the results of its most recent Ohio Utility Rate Survey.

The PUCO’s September survey provides an overview and comparison of electric, telephone, and natural gas bills across Ohio. It includes utility bills paid by industrial customers in eight major Ohio cities. 10/1/2020

EIA: Big Drop in Industrial Consumption of Natural Gas

The consumption of natural gas in the U.S. industrial sector declined from 25.4 billion cubic feet per day (Bcf/d) in January 2020 to 20.1 Bcf/d in June 2020, according to the U.S. Energy Information Administration. Industrial natural gas consumption in June 2020 was nearly 1.0 Bcf/d lower than its year-ago level due to COVID-19. 10/1/2020

OMA Makes Case for HB 6 Repeal and Reform

The OMA this week provided insight and analysis to Ohio lawmakers charged with reviewing the state’s nuclear bailout law (House Bill 6). In a Sept. 23 hearing by the House Select Committee on Energy Policy and Oversight, OMA board member and past chair David Johnson, CEO of Summitville Tiles Inc. in Columbiana County, told lawmakers that the OMA supports repeal and reform of the law. Johnson was one of multiple OMA members who testified against HB 6 last year.

“We believe the preferred legislative package would repeal the anti-market provisions of HB 6 that are punitive to customers,” Johnson said in his testimony. “We suggest a repeal that protects customers and maximizes customers’ cost savings.”

Also testifying were OMA’s energy counsel, Kim Bojko of Carpenter Lipps & Leland LLP, and OMA’s engineering consultant, John Seryak of RunnerStone LLC. Bojko and Seryak explained anti-competitive aspects of HB 6, including the law’s unique decoupling mechanism, as well as the “significantly excessive profits” provision contained in the state’s 2019 budget.

Committee Chair Rep. Jim Hoops (R-Napoleon) told news media that the panel remains in “fact-finding mode.” He has not yet indicated when the committee will vote on proposals to repeal HB 6. 9/23/2020

Ohio Sues to Block Nuclear Subsidies From Being Paid

Ohio Attorney General Dave Yost this week sued FirstEnergy companies, former Speaker Larry Householder, and several other parties for their alleged ties to a scandal involving House Bill 6.

The complaint, filed in Franklin County Common Pleas Court, names 14 defendants, including Householder and his four associates who have been indicted and pleaded not guilty to racketeering charges.

The AG’s office is also seeking to block any party from receiving HB 6 subsidies. Cleveland.com reports that “the lawsuit doesn’t seek to stop the collection of any nuclear bailout money — just to block its payment to Energy Harbor (formerly FirstEnergy Solutions). The suit doesn’t state what would or should happen to any surcharge money collected from Ohioans.”

Meanwhile, FirstEnergy says the attorney general’s complaint is “without legal merit.” 9/24/2020

OCC Again Demands Independent Probe of FirstEnergy

The Office of Ohio Consumer Counsel (OCC) — the state’s official consumer advocate — this week made a second request that utility regulators authorize an independent investigation into whether FirstEnergy improperly used ratepayer funds to fuel what federal prosecutors are calling the biggest bribery scandal in state history.

As reported by Ohio Capital Journal, OCC objected to a directive last week by the PUCO that FirstEnergy itself show that it didn’t use ratepayer funds to pay for a scheme to pass House Bill 6 last year.

The OCC is also asking the PUCO to reopen an investigation into the $465 million FirstEnergy was allowed to collect from Ohio ratepayers in 2017 and 2018 in the form of a “distribution modernization rider.” The Supreme Court of Ohio declared the charge to be unlawful, but the money was not refunded. 9/23/2020

HB 6 Decoupling Explained

During this week’s House hearing on legislation to repeal House Bill 6, discussion and questions centered around the nuclear bailout law’s poorly understood “decoupling mechanism.” The provision, which has been implemented, will assure FirstEnergy utilities will be made whole to 2018 revenue levels.

During an investor call earlier this year, FirstEnergy’s CEO bragged that the provision would make the company “somewhat recession proof.” Previous OMA analysis showed how FirstEnergy utilities stand to benefit from hundreds of millions of dollars in unearned income.

In response to questions from our members and policymakers, OMA technical consultants at RunnerStone LLC have developed this primer on decoupling and how HB 6 decoupling benefits FirstEnergy by deviating from best practices. The research finds that while there is a legitimate purpose and public policy for decoupling, the HB 6-enabled decoupling mechanism is a horse of a different color — one that provides no offsetting customer benefits. Read the memo to compare a typical decoupling mechanism to the special decoupling mechanism in HB 6. 9/17/2020

PUCO Opens Investigation Into FirstEnergy’s HB 6 Spending

Last week, the Ohio Consumers’ Counsel (OCC) requested that the PUCO launch an investigation into FirstEnergy’s political spending to determine if the company used money collected from consumers in its activities associated with the nuclear bailout, House Bill 6.

This week, the PUCO opened a review of FirstEnergy’s political and charitable spending related to HB 6 and the subsequent referendum effort. While this action is more limited than the OCC request, the PUCO directed FirstEnergy to show cause by Sept. 30 that the cost of these activities were not included, directly or indirectly, in any rates or charges paid by customers. The PUCO did not issue a ruling on OCC’s other motions, including the request to re-open the Distribution Modernization Rider audit case.

Interested parties will have an opportunity to file comments on FirstEnergy’s response by Oct. 29 and reply to comments by Nov. 13. 9/17/2020

Report: Fossil Fuels Account for 80% of U.S. Energy Production, Consumption

Research from the U.S. Energy Information Administration (EIA) shows that despite falling costs to produce renewable energy, fossil fuels — including petroleum, natural gas, and coal — continue to account for the largest share of energy production and consumption in the U.S. Last year, 80% of domestic energy production was from fossil fuels, and 80% of domestic energy consumption originated from fossil fuels. 9/16/2020