Energy Management

House Committee Begins Review of HB 6 Repeal Bills

The Ohio House Select Committee on Energy Policy and Oversight has begun consideration of legislation that would repeal the nuclear subsidy law (House Bill 6). The committee this week held initial hearings on two repeal bills (HB 738 and HB 746), as well as HB 740, which would reverse budget language that benefited FirstEnergy by modifying the significantly excessive earnings test.

Rep. Jim Hoops (R-Napoleon), who chairs the select committee, told Gongwer News Service (subscription) “there remains no firm timeline for a potential repeal or for wrapping up the committee’s work.” But Chairman Hoops added that he “has no intention on repeating the hundreds of hours of testimony” heard during the 2019 debate on HB 6. 9/10/2020

Did Utility Customers Foot the Bill for Passage of HB 6?

This week, the Office of the Ohio Consumers’ Counsel (OCC) — the statewide advocate for residential utility customers — filed a motion to compel the Public Utilities Commission of Ohio (PUCO) to conduct a management audit of Akron-based FirstEnergy.

The OCC wants to find out if FirstEnergy or its affiliated companies used money collected from consumers to help pass and defend House Bill 6, the nuclear bailout law. As reported in this Cincinnati Enquirer article, the consumers’ counsel wants the PUCO to appoint an independent auditor “to probe whether millions collected from a fee on FirstEnergy customers’ bills, called a distribution modernization rider, was used improperly.”

The PUCO, which has been mum about the activities of the regulated utility, has until Sept. 23 to make a decision on the OCC’s motion. 9/10/2020

OMA Energy Committee Examines Options to Address HB 6

This week, the OMA Energy Committee held its quarterly meeting. Members were briefed on the options being considered by state lawmakers to address Ohio’s nuclear bailout law (House Bill 6) following the arrest of former Speaker Larry Householder (R-Glenford) earlier this summer. Other highlights of the meeting included:

• A review of HB 6 provisions and consumer costs, presented by OMA Energy Engineer John Seryak, RunnerStone, LLC;
• A summary of recent natural gas market trends, presented by Darin King, NiSource/Columbia Gas of Ohio; and
• An overview of electricity market trends, presented by Susanne Buckley, Scioto Energy.

OMA Energy Committee Chair Brad Belden, president of Belden Brick, reminded members that the committee’s next meeting will be Dec. 2. 9/10/2020

Utilities Cast Doubt on Biden’s ‘Carbon Neutral’ Plan

This week, an analysis by Reuters reported that the U.S. power industry “would struggle to meet presidential hopeful Joe Biden’s proposed mandate that it become carbon neutral by 2035 without some big breakthroughs in clean energy technology.”

According to the news agency, the country’s largest electricity suppliers said “rapid advances in nascent technologies — such as batteries to store power for lean times, carbon capture to trap waste from fossil fuels, and advanced nuclear power — will be critical to reaching net-zero carbon dioxide emissions.” 9/8/2020

Speaker Cupp Appoints Select Committee to Deal With HB6

This week Speaker Bob Cupp appointed the 15-member bipartisan House Select Committee on Energy Policy & Oversight, which will lead efforts to repeal and replace House Bill 6.

Rep. Jim Hoops (R-Napoleon) has been tapped as the chair of the committee.

Meanwhile, the Senate has begun hearings on a straight repeal measure (SB 346), with members of the Senate Energy & Public Utilities Committee. 9/3/2020

OMA Protests Pipeline Rate Hike

The OMA Energy Group has joined a coalition of industrial customers to protest a proposed hike in transmission charges on certain natural gas shipments by as much as 78%. In the joint protest, which is pending before the Federal Energy Regulatory Commission (FERC), the coalition questions the justification for such a large increase.

The increased costs would directly impact customers that ship gas on the Columbia Gas Transmission Pipeline and would be passed on to smaller customers. In addition to the OMA Energy Group, the coalition includes the American Forest and Paper Association, Process Gas Consumers, and the Industrial Consumers of America.

Columbia Transmission is not affiliated with Columbia Gas of Ohio, but is owned by TC Energy Corporation (formerly TransCanada). The case will be discussed at the upcoming meeting of the OMA Energy Committee on Sept. 10. 8/27/2020

Report: FirstEnergy Bullied Lawmakers to Support Subsidies

A Cleveland Plain Dealer article published this week details how FirstEnergy has used its “political might” to pressure Ohio lawmakers over the past several years. The article, which profiles a former state legislator who represented the community served by Davis-Besse nuclear plant, reveals how lobbyists for the utility holding company strong-armed legislators into supporting subsidies.

Ned Hill, a professor of economic development at The Ohio State University and a critic of House Bill 6, is quoted as describing the activity as “crony capitalism” — the kind that occurs “when a business has friends in government who do it favors in exchange for cash payments and political contributions.” 8/27/2020

House Bill 6 Fallout Continues

The Ohio Senate has added a session date next week and may consider options to repeal the nuclear bailout law, House Bill 6. Meanwhile, Attorney General Dave Yost this week threatened to sue to block HB 6 subsidies for Ohio’s nuclear plants. The subsidies would total $150 million a year, generated by fees added to Ohioans’ electricity bills starting Jan. 1.

Also this week, the Associated Press published this story examining the alleged $60 million bribery scheme that led to the arrest of former Speaker Larry Householder (R-Glenford). The article references OMA research that estimates FirstEnergy could reap $355 million in unearned revenue through 2024 due to HB 6’s “decoupling mechanism.” 8/27/2020

Register Now for OMA Energy Committee Meeting

It’s not too late to register for the OMA Energy Committee’s Thursday, Sept. 10 meeting, which will be held online from 10 a.m. to noon (ET). Key topics of discussion will include efforts in the Ohio General Assembly to repeal and/or reform House Bill 6, the nuclear bailout law. 8/25/2020

Ohio’s Energy Policies Result in Hundreds of Millions of Dollars in Customer Charges

Ohio’s nuclear bailout law (House Bill 6) contains a poorly understood regulatory construct called the “decoupling mechanism.” The provision has been implemented and may allow FirstEnergy to collect $355 million through 2024 — and hundreds of millions more in later years — from Ohio’s electric ratepayers, including manufacturers. Read this memo by OMA’s energy consultant RunnerStone for more on this issue. (A key reason the OMA opposed HB 6 was the blank check that the decoupling provision imposes on customers.)

In addition, the House Finance Committee last year inserted language into the state budget (House Bill 166) to alter Ohio’s prohibition of excessive profits by regulated utilities. The provision, which would allow FirstEnergy to keep “significantly excessive” profits rather than issue refunds to customers, is set to take effect next year. Read this memo from OMA energy counsel Kim Bojko of Carpenter Lipps & Leland for more information.

OMA members can join the discussion on these topics at the upcoming virtual meetings of the OMA Government Affairs Committee (Aug. 26) and Energy Committee (Sept. 10). 8/20/2020