News and Analysis
Last month, U.S. natural gas prices surged to their highest summer level in seven years, according to the Energy Information Administration (EIA). The June spot price at the Henry Hub averaged $3.26 per million British thermal units (MMBtu) — only to increase to an average of $3.67/MMBtu during the first two weeks of July. Tighter natural gas supply-and-demand balances have contributed to price increases, the EIA says. 7/29/2021
Fallout from the House Bill 6 scandal continues as FirstEnergy this week agreed to a $230 million penalty for bribing former House Speaker Larry Householder and Sam Randazzo, the former Public Utilities Commission of Ohio chair. According to the acting U.S. attorney for the Southern District of Ohio, Vipal Patel, this is the largest criminal penalty ever collected by his office.
Under the agreement reached with FirstEnergy, the utility cannot pass the costs of the fine onto customers. The $230 million fine will be split 50-50 between federal and state government. Meanwhile, Gov. Mike DeWine said he will donate FirstEnergy’s contributions to his campaign to charity in light of this week’s revelations.
Investigators say FirstEnergy and its affiliated companies conspired with public officials and others to pass the $1 billion, ratepayer-funded nuclear subsidies law. HB 6 also contained a profit-guaranteeing “decoupling” provision (worth an estimated $355 million through 2024).
As The Columbus Dispatch (subscription) reports, between 2017 and March 2020, FirstEnergy Corp. and FirstEnergy Solutions (now Energy Harbor) donated $59 million to Generation Now — a dark money group allegedly controlled by Householder.
This week marked the one-year anniversary of FBI agents arresting former Ohio House Speaker Larry Householder and four others tied to the House Bill 6 scandal, which prosecutors call the largest public corruption scandal in state history.
The anniversary was noted by several media outlets, including Gongwer, which pointed out that over the past year, Ohioans have seen “three guilty pleas to federal racketeering charges; one expelled former House speaker; six fired FirstEnergy senior executives; and the resignation of a Public Utilities Commission of Ohio chairman.” Investigations continue on several fronts.
Despite recent steps taken by the General Assembly to partially repeal HB 6, lawmakers still have not repealed the HB 6 subsidies for two uneconomical coal-fired plants built in the 1950s, including one in Indiana. Under the provision, Ohioans will pay an estimated $700 million to the Ohio Valley Electric Corporation (OVEC), which owns the coal plants. The OMA supports Senate Bill 117 by Sen. Mark Romanchuk (R-Ontario) to repeal the OVEC subsidies and refund customers. 7/21/2021
The ongoing battle over state subsidies in competitive electric markets continues as PJM — the grid operator whose service area includes Ohio — recently backed off its years-in-the-making Minimum Offer Price Rule (MOPR) expansion.
A response to a Federal Energy Regulatory Commission (FERC) order, PJM’s MOPR expansion spelled trouble for state-subsidized generation. The MOPR expansion was applied in the most recent PJM capacity auction, resulting in low capacity prices, increases in low-carbon generation, and healthy reserve margins.
Under PJM’s new proposal, which must be approved by FERC, complaints would be submitted to FERC on a case-by-case basis if a generator uses “conditioned state support” or coordinated “buyer-side market power.” FERC would make the final call. State-subsidized generation would not be subject to the MOPR for a variety of reasons, such as if the subsidy is for “environmental attributes” or “economic development.”
While more analysis is needed, PJM’s new proposal appears to loosen how states can subsidize their favored generators. 7/22/2021
According to a new study of the natural gas and oil industry’s impact on the U.S. economy, fossil fuel production continues to play a vital role in Ohio’s economy, supporting approximately 375,000 jobs in the Buckeye State. That’s 5.3% of Ohio’s total employment.
Gov. Mike DeWine this week signed Senate Bill 52, controversial legislation that modifies Ohio’s siting process for renewable energy projects. Among other things, the new law allows county commissioners to designate all or part of an unincorporated area of the county as a restricted area to prohibit the construction of large-scale wind farms and solar facilities, according to an LSC summary.
During the bill’s consideration, the OMA opposed local differences in siting processes in favor of a statewide approach — overseen by the Ohio Power Siting Board — to ensure clarity, uniform policy, and economy of process. 7/12/2021
FirstEnergy customers are set to receive a “decoupling” refund on their August electricity bills — thanks to OMA-supported legislation (House Bill 128) that partially repealed the scandal-tainted House Bill 6.
Earlier this week, the Public Utilities Commission of Ohio (PUCO) — due in part to the OMA Energy Group’s legal advocacy — approved FirstEnergy’s plan to refund customers more than $27 million in fees collected through HB 6’s decoupling mechanism, which allowed the utility to guarantee itself revenue. Refund amounts will vary based on customers’ electric use this August. (Here are the refund rates.)
Prior to the PUCO’s approval, the OMA Energy Group provided an active voice in legal proceedings to advocate for a full refund of the decoupling dollars, partnering with the attorney general and Office of the Ohio Consumers’ Counsel.
HB 128, which was passed in March and took effect June 30, required the decoupling refunds. The bill also repealed HB 6’s centerpiece — more than $1 billion in subsidies for two nuclear plants operated by a former FirstEnergy subsidiary. 7/8/2021
Portions of the U.S. are at elevated or high risk for potential electricity emergencies this summer, according to a new reliability assessment from the North American Electric Reliability Corporation (NERC). Fortunately, Ohio and the rest of PJM territory are at “low risk” of disruptions, the report found. NERC says electricity shortages are most likely in the western U.S., Texas, New England, and parts of the Midwest. 7/6/2021
When compared to other states, Ohio has the 13th lowest energy costs, according to a new study by WalletHub. The comparison considered monthly residential costs for electricity, natural gas, motor fuel, and home heating oil.
For the latest average electricity prices for industrial customers, see the U.S. Energy Information Agency’s comparison, in which Ohio also performs favorably. 7/7/2021
The national average price of gasoline has increased 40% since the start of the year. And prices are expected to rise another 10 to 20 cents — to more than $3.25 a gallon — by the end of August, according to a new analysis by AAA. This heat map shows current average gasoline prices across all 50 states. 7/7/2021v