News and Analysis
PUCO Schedules July 13 Review of Power Outages
June 30, 2022The OMA has learned that officials with AEP Ohio, AEP Transmission, and PJM Interconnection will soon appear before the Public Utilities Commission of Ohio (PUCO) to discuss the power outages that affected hundreds of thousands of Ohioans earlier this month. This week’s announcement follows the OMA’s June 16 call for a review.
The July 13 review will take place immediately following the PUCO’s regularly scheduled 1:30 p.m. public meeting at 180 E. Broad Street in Columbus in hearing room 11-B. The meeting is open to the public and will be livestreamed on the PUCO’s YouTube channel. 6/29/2022
Environmental Groups Sue Biden Administration for Oil Gas Lease Sales
June 30, 2022Despite the need for more domestic oil and gas production, a coalition of environmental groups has sued the Biden administration over its approval of oil and gas lease sales. The lease sales in Montana, Nevada, North Dakota, and Utah mark the first since the administration temporarily froze new lease sales on federal lands in January 2021. 6/29/2022
Gov. DeWine Seeks Answers on AEP Power Outages
June 24, 2022Gov. Mike DeWine has joined the chorus of those wanting answers from AEP regarding recent widespread power outages, calling for a review by the Public Utilities Commission of Ohio. The outages affected more than 230,000 Ohioans, including some manufacturers. DeWine’s statement follows the OMA’s earlier call for a review by the PUCO and grid operator PJM Interconnection.
A Columbus news outlet reports that AEP’s most recent report to the PUCO “proposed hundreds of millions of dollars” in grid improvements through 2024. A former AEP engineer said if these enhancements were to have a significant impact, “they would have to be completed much faster.” 6/22/2022
PJM Auction Sets 10-Year Low for Generation Prices
June 24, 2022PJM — the grid operator whose service area includes Ohio — has issued the results of its Base Residual Auction (BRA) for capacity for the 2023/24 delivery year. Auctions are usually held annually, three years in advance; however, the BRA had been delayed while the Federal Energy Regulatory Commission created new rules to discourage state subsidies from influencing competitive market pricing. Thus, the 2023/24 BRA is the second auction to take place under a compressed timeline.
This spring’s auction featured a paired down and less restrictive Minimum Offer Price Rule, which had been introduced in the previous BRA. The resulting capacity price is $34/MW-day — the lowest capacity price in ten years. Nuclear, solar, combined-cycle natural gas, and energy efficiency resources all cleared more megawatts in this auction, while demand response, wind, and hydro all decreased. Steam units (primarily coal) saw a steep decline of 7,186 MW, about a 20% decrease. The BRA procured a 20.3% reserve margin, far exceeding PJM’s reliability target of 14.8%. 6/23/2022
Energy Roundup: NAM Criticizes Call to Suspend Fuel Tax
June 24, 2022- The Energy Information Administration says wholesale electricity prices this summer “will significantly increase” in several regions — including Ohio.
- The National Association of Manufacturers has denounced President Biden’s call to suspend the federal fuel tax, saying it would be a step backward after last year’s infrastructure law.
- Several large solar developers have announced a new coalition that will buy up to $6 billion in U.S.-made panels, which could more than double domestic solar-manufacturing capacity.
- A proposed hydrogen plant in Piketon, Ohio is gaining steam, according to reports, as developers say the facility will generate more than 225 megawatts of electricity and 500 metric tons of hydrogen a day for the manufacture of cement and silica.
- U.S. Treasury Secretary Janet Yellen has rejected calls to resurrect the Keystone XL oil pipeline, reports say. (The pipeline, cancelled by President Biden in early 2021, was expected to go online in 2023, delivering up to 1.1 million barrels a day.)
In other developments, a new survey conducted for the National Mining Association shows strong bipartisan concern over power blackouts. Nearly 90% of respondents expressed worry over increased electricity prices. 6/23/2022
Hundreds of Thousands of Ohioans Lose Power
June 17, 2022Hundreds of thousands of AEP Ohio customers were without electricity this week as heat indices in excess of 100 degrees triggered heavy demand on a storm-damaged electric grid. At one point on June 14, more than 350,000 Ohioans were without electricity, according to this map. Central Ohio was heavily impacted as AEP Ohio implemented rare “intentional load shedding.”
OMA President Ryan Augsburger told media outlets that while manufacturers understand storm damage is a legitimate cause of service interruptions, “manufacturing customers of AEP Ohio have been paying significantly higher electricity charges for transmission investments, distribution investments, and ‘smart grid’ features that were intended to improve grid resiliency and avoid intentional load shedding.”
Augsburger added: “When a manufacturer is down, they bare additional lost production expense and may incur ruined product expense. Manufacturers expect a full and publicly transparent review of the grid failures this week by the grid operator, PJM Interconnection, as well as the state regulator (PUCO).”
If your manufacturing facility experienced power outages, email Ryan Schuessler of OMA energy partner GoSustainable Energy to document your experience for the OMA. 6/14/2022
EIA: Natural Gas Prices to Remain High for Rest of 2022
June 17, 2022The U.S. Energy Information Administration, in its latest short-term forecast, says natural gas spot prices will remain high through the rest of 2022. Natural gas spot prices at the U.S. Henry Hub benchmark are expected to average $8.71/MMBtu this summer (June through August) as demand for natural gas outpaces production, with signs of relief in early 2023. 6/14/2022
Biden and Refiners Clash Over Fuel Shortages
June 17, 2022President Joe Biden is targeting refiners as being a choke point for fuel supplies — and floating the notion he could use the Defense Production Act to try to raise gasoline production, according to Politico. But the publication says there are questions about what actions exactly the industry can take since “refiners are now running nearly flat out but still struggling to meet the demand.”
Exxon Mobil responded by telling the White House to look inward, urging the enactment of emergency measures (such as regulatory waivers) used by previous administrations during supply disruptions. The American Petroleum Institute and American Fuel & Petrochemical Manufacturers sent their own letter encouraging Biden to promote long-term investment “through clear and consistent policy that supports U.S. resource development.”
Chevron CEO Mike Wirth has said he does not expect another oil refinery to be built in the U.S. ever again due to federal government policies. 6/16/2022
Number of EV Models to Double by 2024
June 17, 2022VisualCapitalist has published this infographic showing the number of electric vehicle (EV) models available in the U.S. will double by 2024 compared to what was available at the beginning of this year. It’s expected that there will be 134 models on sale in the U.S. in just 18 months.
Meanwhile, the Biden administration has released new standards for its goal of building 500,000 EV charging stations nationwide by 2030, according to this insight from OMA Connections Partner Jones Day. 6/16/2022
Energy Roundup: Ohio Is a Potential Hydrogen Hub
June 10, 2022- The U.S. Department of Energy has begun the process of distributing $8 billion to develop regional hydrogen hubs — authorized under the federal infrastructure law. (Ohio could be selected to land one of these hubs, according to this asset map.)
- Total investment in Ohio’s shale energy sector was approximately $2.3 billion in the first half of 2021, with cumulative investment surpassing $95 billion, according to a new study from Cleveland State University.
- Natural gas prices of $10 or more are possible in the “fairly near future,” according to analysts.
- As fuel prices continue to set new record highs, OMA Connections Partner RSM has published this analysis deconstructing the price of gasoline.
Meanwhile, U.S. solar manufacturers are upset with the Biden administration for temporarily waiving tariffs on imported solar products. The White House’s tariff reprieve was criticized by members of Ohio’s congressional delegation, including U.S. Sen. Rob Portman (R-OH), as well as Gov. Mike DeWine. The OMA has issued this statement. 6/9/2022