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AEP supports FirstEnergy’s request for zero-emission tax credits
FirstEnergy is requesting approval from Ohio legislatures for zero-emission tax credits to keep two nuclear power plants—the Davis-Besse plant and the Perry plant—afloat, UtilityDive reports. Fellow Ohio utility American Electric Power (AEP) has expressed support for those subsidies, so long as AEP customers do not pay for them. FirstEnergy’s proposal would keep those plants “generating carbon-free energy through their expected lifespan,” but “the extra costs would be borne by consumers and could affect market revenues for gas generators.”
FirstEnergy and AEP “both won support for struggling coal and nuclear generation from the Public Utilities Commission of Ohio” last year, but the Federal Energy Regulatory Commission “subsequently blocked the deals, leading to talk of plant sales and re-regulation as many aging baseload plants struggle to compete with low-cost natural gas and renewable energy.” For more, read the full article.
Ohio voters oppose utility re-regulation, want to keep energy choice
While Ohio’s “traditional monopoly power companies” lobby state lawmakers to “return to a fully regulated system,” a recent poll shows a majority of voters are opposed to changing from a competitive market to one with less choice, Cleveland.com reports. Fallon Research and Communications polled “more than 800 Ohio voters” in January 2017, and found that “[m]ore than 91 percent would oppose any law change allowing FirstEnergy or Columbus-based AEP to build new power plants and raise monthly rates to pay for them,” according to the article. In addition, “[n]early 79 percent would oppose any legislation that did away with a customer’s choice to shop for power suppliers.” American Electric Power (AEP), FirstEnergy and Dayton Power & Light “have already been talking about ‘re-structuring’” as state legislators “consider changing Ohio’s 16-year embrace of competition.” For more, read the full article.
Will Ohio lawmakers re-regulate state’s power market in 2017?
Re-regulation of Ohio’s power market “will get a long, hard look at the Statehouse this year,” as American Electric Power Company Inc. (AEP) pushes a proposal arguing that “deregulation is harming [AEP] so much that its remaining power pants in the state are too expensive to operate and has made it too costly to build new ones,” Columbus Business First reports. However, “developers building natural gas-fueled power stations in the state,” which are privately funded, “warn that a return to a regulated marketplace would force them out and make it more expensive for Ohio electricity consumers.” Companies with high power consumption also “want to keep the ability to shop for the lowest rates through retailer energy sellers,” according to the article. AEP has said it will continue to allow customers to shop for power. For more, read the full article.
U.S. Supreme Court decision may undercut PUCO's recent PPAs for Ohio utilities
On April 19, 2016, the United States Supreme Court, in Hughes v. Talen Energy Marketing, LLC, unanimously (8-0) struck down an order from Maryland’s Public Service Commission which “impermissibly intrudes upon the wholesale electric market, a domain Congress reserved to [the Federal Energy Regulatory Commission] FERC alone.” The ripples from the Court’s decision may well affect two cases recently decided by the Public Utilities Commission of Ohio (PUCO), also involving subsidized power purchase agreements between regulated utilities (American Electric Power-Ohio (AEP) and FirstEnergy Corp. (FE)) and their unregulated generation affiliates. For more information, read Bricker’s article, “U.S. Supreme Court decision may undercut recent PUCO decisions approving ratepayer-subsidized power purchase agreements for Ohio utilities.”
Join us for Bricker & Eckler’s Energy Exchange event
Energy companies, policy makers, regulators, business owners and others are invited to Bricker & Eckler’s biannual “Energy Exchange” event on Thursday, March 31, 2016, in Columbus, Ohio. This free-of-charge networking and educational opportunity will address the latest trends, rules and regulations impacting the energy industry. Bricker attorneys will discuss power purchase agreement matters pending before state and federal regulatory agencies; the status of renewable energy legislation, such as Senate Bill 310; and eminent domain related issues impacting pipeline development in Ohio. Additionally, keynote speaker Robin Rorick, the American Petroleum Institute's Group Director of Midstream and Industry Operations, will address the audience.
Visit the Energy Exchange event page for more information or to register.
PUCO Nominating Council seeks applicants to fill commissioner seat
Next spring, a seat will open up next on the five-member panel responsible for regulating Ohio’s public utilities. The Public Utilities Commission of Ohio (PUCO) Nominating Council is accepting applications for a five-year commissioner appointment that begins in April 2016, according to a recent PUCO press release. Applications must be submitted by January 14, 2016; the Nominating Council will then “narrow the list to those most qualified for the position” before interviewing selected applicants, according to the release. The council will “recommend four finalists to Gov. John R. Kasich,” who will then have 30 days to “either appoint a commissioner from the list or request a new list from the Nominating Council.” Appointments are subject to Ohio Senate confirmation. For more, and to read the full text of the position posting, click here.
PUCO delays individual sub-metering case to open broader investigation
One consumer’s complaint about sub-metering will have to wait a bit longer, as the Public Utilities Commission of Ohio (PUCO) decided to open an investigation into the practice of landlord sub-metering, according to a recent Hannah Report. The commission voted to delay Mark A. Whitt v. Nationwide Energy Partners (for more on this, see our June 16, 2015 article) as it proceeds with “a separate docket to allow the Ohio Consumers’ Counsel (OCC) and other interested parties to weigh in on the unregulated re-sale of electricity,” according to the article. The “increasingly controversial practice” of sub-metering prompted “four pieces of legislation in the previous General Assembly”: 130-HB422 (Foley-Blair), 130-HB545 (Gonzalez), 130-HB568 (McGregor) and 130-HB662 (Duffey-McGregor). PUCO Commissioner Lynn Slaby was the only dissenter in the 4-1 vote, saying, “the commission lacks jurisdiction over this complaint and accordingly must dismiss. Conspicuously absent from [Ohio Revised Code] Section 4905.03, which lists the activities which constitute a public utility for purposes of vesting the commission with jurisdiction, is sub-metering activities.” Commissioner Asim Haque said the investigation “would move forward ‘expeditiously,’ with its scope determined by year’s end.
OSU takes next step in bringing energy privatization plan to reality
When officials at The Ohio State University (OSU) announced a first-of-its-kind plan to privatize the university’s energy management, the number of interested companies exceeded their expectations (see our July 3, 2015 blog post for more). Now OSU is ready to take the next step in making the plan a reality, and is asking for more information from the potential partners who expressed interest, Columbus Business First reports. OSU’s Comprehensive Energy Management Plan calls for a company or partnership of companies to “pay for a 50-year lease and be in charge of operating and maintaining its utility system, buying its energy, hitting energy-efficient goals and creating an affinity agreement with the university.” Interested companies should provide information about how their plan would look “operationally and financially,” and submit that plan by December. This step “should help shed some light on what, exactly, privatizing the school’s vast energy resources might look like,” according to the article. If the university receives “enough adequate responses,” it will narrow down the options and ask for bids on the project. For more, read the full article.
AEP income guarantee should be rejected, says PUCO staff
As it did with FirstEnergy’s request for an income-guarantee plan (see our September 23, 2015 blog post for more), the staff of the Pubic Utilities Commission of Ohio (PUCO) has recommended the commission to deny American Electric Power (AEP)’s proposed power purchase agreement (PPA), Columbus Business First reports. Hisham Choueiki, an energy expert in the rates and analysis department of the PUCO, authored both staff recommendations; Choueiki “said the AEP proposal doesn’t give the commission enough oversight and fails to spread financial risk to the company instead of ratepayers,” according to the article. AEP said the proposal “would act as a hedge for power customers,” and in a statement said the company thinks it “has addressed and fulfilled the criteria for approval.” AEP and FirstEnergy are both seeking long-term contracts to buy power from their Ohio subsidiaries that own power plants; if approved, “[t]he utilities said customers would pay more at first but, according to their electric-price projections, receive a net benefit over time.” AEP Ohio President Pablo Vegas said the PPA would help ensure those plants are kept open instead of being sold. For more, read the full article.
PUCO staff recommends rejecting FirstEnergy income-guarantee plan unless modified
The income-guarantee plan FirstEnergy is seeking from the Public Utilities Commission of Ohio (PUCO) (see our September 8, 2014 blog post) “should be rejected unless it gets a major overhaul,” the staff at the PUCO recommends, according to a recent article in The Columbus Dispatch. A senior energy specialist for the PUCO, Hisham Choueiki, gave written testimony saying the plan could be in the public interest “if properly conceived.” Changes suggested by the staff include: reducing the term of the income guarantees from 15 years to 3 years, revisions “that would mean FirstEnergy would share some of the financial risks with consumers,” and a commitment by FirstEnergy “to provide data to the state to allow for a more rigorous examination of the proposal,” according to the article. The PUCO’s decision on FirstEnergy’s request has implications for American Electric Power (AEP), which has made a similar request (see our May 21, 2015 blog post); AEP’s case hearing is scheduled for September 28, 2015. For more, read the full article.