Energy Management

Utilities Testify to Keep the OVEC Subsidies Coming

Utility interests testified this week in opposition to Senate Bill 117, legislation that would repeal the OVEC subsidies authorized by the scandal-tainted House Bill 6. Shockingly, the utilities testified that the OVEC subsidies are in fact not subsidies since there’s a slim chance customers could some day receive a rebate.

Under questioning from committee members, it was conceded that at no time since OVEC’s creation had any customer even received a credit from the riders. The operator of OVEC — which is jointly owned by several parent electrical utilities — also conceded that the two coal plants being subsidized by HB 6 would not close if the rider was eliminated.

The OMA has led efforts to eliminate the unnecessary OVEC subsidy, which could amount to $700 million in ratepayer dollars by the time it expires in 2030. The OMA continues to work with SB 117’s sponsor, Sen. Mark Romanchuk (R-Mansfield), to eliminate the subsidy and protect manufacturers from unnecessary electric charges and riders. 6/17/2021

OMA Energy Group Seeks to Ensure Transparency of Decoupling Refunds

The OMA Energy Group (OMAEG) is leading the effort at the Public Utilities Commission of Ohio (PUCO) to ensure FirstEnergy customers receive a full and immediate refund of nearly $30 million paid under House Bill 6’s decoupling provisions.

As reported by Gongwer News, under HB 6’s decoupling provision, which has since been repealed, FirstEnergy was authorized to collect revenue through a rider that guaranteed the company’s revenue at record-setting 2018 levels (about $978 million). The repeal legislation — House Bill 128, which takes effect June 30 — requires those funds to be promptly returned to consumers.

The OMA wants the PUCO to make public the records used to calculate decoupling refunds — and to ensure those records are independently verified. 6/14/2021

Eight Straight Weeks of Rising Fuel Prices

Gasoline prices rose for the eighth straight week as crude oil has surpassed $70 a barrel. GasBuddy reported that the national average price for gasoline climbed to $3.07 per gallon; the average for diesel was $3.21. Check out this heat map from AAA for the latest average price for gasoline in your county. 6/16/2021

OMA Supports Enbridge Line 5 Pipeline

The OMA this week supported a measure (Senate Resolution 41) that implores the governor of Michigan and director of the Michigan Department of Natural Resources to exercise all efforts to keep the Enbridge Line 5 pipeline operating.

The owner of the pipeline is currently embroiled in a legal battle with the State of Michigan over whether it can operate through the Straits of Mackinac, which connect Lakes Huron and Michigan. Enbridge Line 5 is a major oil pipeline that carries petroleum from Canada to multiple Ohio oil refineries, which provide resources for countless manufacturers. 6/10/2021

AEP Subpoenaed by Federal Regulators in HB 6 Inquiry

In the latest development tied to the House Bill 6 scandal, AEP has received a subpoena from the U.S. Securities and Exchange Commission (SEC). Gongwer News reports that the Columbus-based utility believes its participation in the HB 6 process “was at all times lawful and ethical” and that the company is cooperating fully with the SEC’s subpoena.

Over the past year, it has been discovered that AEP contributed large amounts of money in support of HB 6 through wholly-funded dark money groups. 6/9/2021

House Holds Hearings on Householder Expulsion

The Ohio House this week kicked off hearings on two measures (House Resolutions 69 and 70) aimed at removing Rep. Larry Householder (R-Glenford) from the General Assembly. The former speaker, who faces federal corruption charges related to the House Bill 6 scandal, has been invited to provide “voluntary” testimony at the Tuesday, June 15 hearing on HR 69.

Householder, his political strategist Jeff Longstreth, and lobbyists Neil Clark, Matt Borges, and Juan Cespedes were indicted last summer — accused of accepting $61 million from FirstEnergy through the dark money non-profit Generation Now to help ensure enactment of HB 6, the law that authorized customer-funded subsidies for nuclear generation, OVEC coal plants, and more. 6/10/2021

Developer Pulls Plug on Keystone XL Pipeline

Environmental activists celebrated the news this week that TC Energy Corp. had officially canceled the Keystone XL pipeline, which was to bring Canadian oil to U.S. refiners. Earlier this year, President Joe Biden revoked a federal permit needed to complete the 1,200-mile project. The American Petroleum Institute called the development “a blow to U.S. energy security” and the employment of thousands of high-paying union jobs. 6/10/2021

Senate Passes Controversial Wind and Solar Bill

On a 20-13 vote that included five Republicans voting no, the Senate this week passed Senate Bill 52, legislation that would make sweeping changes to Ohio’s power siting process for large-scale wind and solar projects. The bill now heads to the House.

While SB 52 saw major changes from its original language, the substitute bill would still give final decision-making authority to local governments instead of the Ohio Power Siting Board — which is currently tasked with approving such projects. The OMA opposed the bill in committee and remains concerned about the precedent it would set, as well as potential long-term impacts to onsite power generation. 6/3/2021

FirstEnergy Fires Another Executive Tied to HB 6 Scandal

Late last week, it was reported that FirstEnergy informed federal regulators that the company had fired another senior executive — more fallout related to the House Bill 6 scandal. Former Senior Vice President Eileen Mikkelsen was dismissed for her “inaction” in the face of a $4.3 million payment linked to Sam Randazzo, the former chairman of Public Utilities Commission of Ohio, reports say. 6/1/2021

PJM’s First Capacity Auction in Three Years Yields Low Electricity Prices

PJM — the grid operator whose service area includes Ohio — has completed its first Base Residual Auction (BRA) for capacity in three years for the 2022/23 delivery year. The BRA had been delayed while the Federal Energy Regulatory Commission (FERC) created new rules to discourage state subsidies from influencing competitive market pricing.

This spring’s auction was the first to implement FERC’s Minimum Offer Price Rule (MOPR) — and may be the only auction to do so. Natural gas-fueled generation, nuclear, solar, wind, and energy efficiency all cleared more megawatts in this auction, while coal plants experienced a significant reduction. The resulting BRA capacity price was $50/MW-day — the lowest capacity price in nine years. The BRA procured a 19.9% reserve margin, far exceeding PJM’s reliability target of 14.5%. Duke Energy’s Ohio customers will pay a slightly higher — but still low — capacity price of $71.69/MW-day.

Missing out on the low market prices and marked increase in low and no-carbon generation was Dominion Energy, which pulled out of the market, apparently to increase its renewable energy supply. 6/3/2021