News and Analysis
In 2019, U.S. annual energy consumption from renewable sources exceeded coal consumption for the first time since before 1885, according to the U.S. Energy Information Administration. This outcome mainly reflects the continued decline in the amount of coal used for electricity generation over the past decade, as well as growth in renewable energy, mostly from wind and solar. 6/4/2020
The House Public Utilities Committee this week heard from the sponsor of House Bill 246, Rep. Nino Vitale (R-Urbana), who reviewed provisions of the new substitute version offered and accepted by the committee. The new version, which is being reviewed by OMA staff, appears to make numerous changes to laws regulating utility companies.
Also this week, the House Energy and Natural Resources Committee approved House Bill 104, sponsored by Rep. Dick Stein (R-Huron). The bill is intended to spur nuclear research and commercialization. View the comparison document to see what changed. The OMA had expressed concerns regarding the original version and is studying the changes. 5/28/2020
In a blistering editorial, The Plain Dealer has taken policymakers to task for allowing the owners of Ohio’s nuclear power plants to scam Ohio’s ratepayers. As the OMA reported earlier, the owner of the plants, Energy Harbor (formerly FirstEnergy Solutions), recently announced it would be rewarding investors with hundreds of millions dollars of stock buybacks. This was made possible because the company and its allies were able to persuade lawmakers in Columbus to enact House Bill 6 last year. 5/28/2020
A 50% drop in investments by U.S. shale sector companies this year could lead to a price spike in oil and natural gas following the historic pandemic-caused crash. That’s according to a new report by the International Energy Agency (IEA). The cuts in U.S. shale production are spurring what the IEA expects in 2020 to be the largest single-year decline in overall global energy investment on record. 5/27/2020
Appearing at the OMA Energy Committee this week, Richard Ricks of Columbia Gas of Ohio gave a presentation showing trends impacting natural gas supply and demand. Susanne Buckley of Scioto Energy provided a report on electricity market trends and future price forecasts. 5/21/2020
More than 70 members virtually joined the OMA Energy Committee committee meeting this week. All OMA committee meetings through at least third quarter will be held virtually.
Special guest presenter, Dr. Joseph Bowring, the PJM Independent Market Monitor, spoke on the impact of the FERC Minimum Offer Price Rule (MOPR) order on customers’ power bills. Dr. Bowring has noted repeatedly that state legislation to subsidize certain power plants is unfair to markets. In his presentation he concludes that the landmark FERC MOPR order “is not expected to have an impact on the clearing prices and auction revenues in the 2022/2023 RPM BRA (wholesale power auction).” 5/21/2020
Leaders of Energy Harbor — formerly known as FirstEnergy Solutions — have moved to repurchase an additional $300 million of its own stock, according to a report this week at Cleveland.com. (The Statehouse News Bureau also covered the story.) This comes as Ohio electricity customers — including manufacturers — are about to subsidize the company to the tune of $150 million annually through surcharges imposed by House Bill 6, last year’s nuclear bailout law.
The article quotes Ned Hill, a professor at The Ohio State University, who said contrary to the company’s arguments that it was in financial trouble, the buyback shows Energy Harbor’s management is confident it will make money as it now rewards shareholders.
Nearly a year ago, as he delivered OMA opponent testimony on HB 6, former OMA Chairman David W. Johnson of Summitville Tiles urged Ohio lawmakers to require an annual, independent profitability analysis before the state doled out Ohioans’ moneys to the generation company that is now Energy Harbor. That, of course, didn’t happen. Join the discussion at the OMA Energy Committee meeting next week. 5/13/2020
Due to the COVID-19 crisis, the International Energy Agency expects the biggest worldwide decline in electricity consumption since the Great Depression, according to The Wall Street Journal. “It is as if Germany and France were both turned off for the year,” the story notes. In the U.S., the drop has been most severe in New York City, where wholesale power prices averaged $16.57 a megawatt-hour in the first six days of May — down by more than a quarter from the start of the 2020.
Meanwhile in Ohio, despite lower electricity consumption, Ohio electric distribution utility FirstEnergy is assured to enjoy record profits due to the new decoupling rider authorized by HB 6. Under the mechanism, if annual revenue in a given calendar year is less (or greater) than 2018’s baseline revenue, FirstEnergy utilities will charge (or credit) the difference to customers through the decoupling rider. 5/11/2020
The U.S. renewable energy industry continues to suffer from the pandemic. As many as 120,000 jobs in solar and 35,000 in wind could be lost, trade groups say. The wind industry, in particular, is plagued by slowdowns in obtaining parts from overseas, according to the AP. 5/4/2020
Today, the U.S. is 100% import-reliant on many minerals and metals that are essential for defense technologies, consumer goods, and clean energy technology. VisualCapitalist.com has published a new infographic to spotlight China’s dominance in the production of critical minerals needed for the new energy era. 5/7/2020