Energy Management

Will House Bill 6 Be Repealed?

Gov. Mike DeWine on Thursday told reporters he supports “repealing and replacing” the controversial House Bill 6 — Ohio’s nuclear bailout law approved last year. He said he still supports the underlying policy, but that the process leading to its passage “forever tainted the bill and now the law itself.” The governor said HB 6 should be revisited with legislation that is transparent in its implementation.

On Thursday, July 23, a group of legislators from both chambers held a press conference and announced a bipartisan effort to repeal HB 6. Rep. Rick Carfagna (R-Genoa Township) said the bill has up to 33 co-sponsors in the 99-member House. He was joined by Rep. Laura Lanese (R-Grove City), a member of House leadership. Sen. Stephanie Kunze (R-Hilliard) is working on a Senate version with Sen. Sean O’Brien (D-Bazetta). 7/24/2020

Natural Gas Spot Prices Reached Record Lows in First Half of 2020

The EIA reports that in the first half of 2020, natural gas prices at the U.S. Henry Hub benchmark reached record lows. The average monthly spot price in the first six months of the year was $1.81 per million British thermal units (MMBtu). Monthly prices reached a low of $1.63/MMBtu in June, the lowest monthly inflation-adjusted price since at least 1989. 7/20/2020

PUCO Rejects AEP’s Recession-Proofing Rider

This week, the Public Utilities Commission of Ohio (PUCO) rejected AEP’s request to establish a decoupling mechanism authorized by House Bill 6, the nuclear bailout legislation. The PUCO determined that AEP’s proposed decoupling mechanism was not consistent with HB 6’s language since AEP proposed to decouple only from “other commercial customers.” Ohio law requires the decoupling mechanism to apply to residential and commercial customers.

The OMA Energy Group was the only party to intervene and file comments in the case, which could have resulted in new costs for all customers in AEP service territories. In their ruling, the PUCO acknowledged concerns expressed by the OMA Energy Group about the potential for AEP to double recover lost demand revenues through the decoupling mechanism and the already-authorized COVID-19 deferral.

This decision is good for customers and we congratulate OMA Energy Counsel Kim Bojko. Unfortunately, customers in FirstEnergy territories are already paying additional costs to guarantee FirstEnergy utilities can collect the same record revenue as they collected in 2018, despite lower electricity use. 7/16/2020

Report: Appalachian Energy is Key to COVID Recovery

A new federal report touts the abundance of natural gas in Ohio and other states as vital for national and state economics recovering from the pandemic. The Department of Energy study says, “Appalachia can expect to grow via energy resource production, next-generation manufacturing, and petrochemical industry development and expansion.” An accompanying fact sheet notes “85% of the growth in U.S. natural gas production over the past decade has occurred in northern to central Appalachia.” 7/14/2020

Study Shows Ohio’s Residential Energy Expenses Are About Average

Financial website WalletHub.com recently compared the monthly energy bills in all 50 states and the District of Columbia. The study considered the following residential energy types: electricity, natural gas, motor fuel and home heating oil. Ohio has the 23rd lowest average energy bill for households, according to WalletHub. 7/14/2020

Water Infrastructure Refinancing Bill Passes Senate With HB 6 Provision

This week, the Ohio Senate approved a notable amendment to a water infrastructure bill, House Bill 264. The amendment modifies last year’s nuclear bailout law (House Bill 6) to provide up to $300,000 to the state agency charged with reviewing financials of Ohio’s two nuclear power plants to verify they are losing money before the plants can receive $150 million a year in ratepayer-funded subsidies.

Recently, Energy Harbor, the owner of the power plants, rewarded investors with hundreds of millions of dollars in stock buybacks. Not bad for a company that just emerged from bankruptcy. 7/1/2020

Coalition Formed for Transportation Fairness

A national coalition has been formed to advance public policies that support a competitive and equitable transportation sector. According to the Transportation Fairness Alliance, the coalition is comprised of associations that “represent manufacturers, small business owners, farmers, and folks who pay utility bills.” They are taking aim at public policies that create incentives for electric vehicles and related infrastructure.

The OMA has monitored Statehouse proposals that would require Ohioans to subsidize the construction of electric vehicle charging stations via a rider on customer power bills. The OMA has pointed out to policymakers that a competitive market for such infrastructure is a preferable approach.

Meanwhile, a coalition of environmental organizations and others has launched a website to counter the Transportation Fairness Alliance. At issue is the ongoing debate of markets versus mandates. A deeper dive is planned for the Sept. 10 OMA Energy Committee meeting. 7/1/2020

Last Year’s Petroleum Imports Hit 70-Year Low

Providing further evidence that the fracking revolution has been positive for American energy independence, the U.S. Energy Information Administration (EIA) reports that last year, net imports of petroleum from foreign countries accounted for about 2.7% of the U.S. average daily petroleum consumption. This was the lowest percentage of net petroleum imports since 1949, the first year for which the EIA has historical data. 6/22/2020

Report: Appalachia Natural Gas Productivity Increased Again in 2019

Increased U.S. natural gas production has helped bring lower energy costs to manufacturers. The U.S. Energy Information Administration’s (EIA) latest drilling report shows that domestic production increased in 2019 due to, in part, greater productivity of new wells drilled in shale and tight formations. Since 2007, gross natural gas production from the EIA’s Appalachia (includes eastern Ohio) and Haynesville (Arkansas, Louisiana and Texas) regions has grown at an average annual rate of 20%. 6/17/2020

Another Energy Bill Appears to Take Aim at Ohio Customers

Last week, State Rep. Nino Vitale (R-Urbana) unveiled a new version of House Bill 246, legislation to purportedly modernize state agencies that regulate utilities. The bill would impose new risks on manufacturers and could give utilities even more sway over the regulations that govern them. It would also provide monopoly utilities an unfair advantage against competitive energy companies, including developers of renewable energy and electric vehicle charging businesses. Other provisions of HB 246 would diminish the role and voice of customer advocates in proceedings before the PUCO.

Also, the bill would create a natural gas supply access investment program within the Ohio Public Works Commission. The Commission traditionally coordinates the construction of public buildings and infrastructure financed from state approved bonds, which does not include privately-owned energy infrastructure. This provision appears to bypass market economics.

The OMA will convey its concerns to the General Assembly in the coming weeks. View our preliminary analysis. 6/11/2020