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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--When the Ohio state legislature reconvened in mid-September, it had a full plate of electricity issues awaiting it, involving financial support for nuclear power and coal generation, as well as efforts to expand renewable energy. Republicans are in a majority in the Ohio House and Senate.
FirstEnergy Corporation (NYSE:FE) (Akron, Ohio) will resume its push for financial support for its two uneconomic nuclear power plants, Davis-Besse and Perry. FirstEnergy spokesperson Jennifer Young told Industrial Info "nothing has changed" with the utility's request for about $300 million per year for a period of 16 years to compensate the utility for the non-emitting characteristic of its nuclear pants. "We continue to meet with people and talk about the importance of nuclear in Ohio," she said.
Even though FirstEnergy may try to sell its nuclear plants, it wants to be compensated up to about $5.28 billion for owning them. The company's effort to secure that financial support earlier this year was met by howls of protest from environmental and consumer groups as well as competing merchant power plant owners. For more on that issue, see May 30, 2017, article - Down but Not Out? FirstEnergy Still Seeking $300 Million Per Year in Nuclear Support and March 30, 2017, article - Will FirstEnergy Achieve ZEN for its Ohio Nuclear Plants?
FirstEnergy is trying to follow in the footsteps of Exelon Corporation (NYSE:EXC) (Chicago, Illinois), which was able to secure huge amounts of financial support to keep uneconomic nuclear plants open in Illinois and New York. For more on that, see December 20, 2016, article - Exelon Wins Financial Aid for Two Uneconomic Nuclear Plants and August 3, 2016, article - Cash on the Barrel: New York Clean Energy Standard Includes Multibillion-Dollar Support for Nuclear Power's Carbon-Free Generation. Exelon has said it will close its Three Mile Island Nuclear Generating Station in Pennsylvania unless it receives financial support that recognizes nuclear non-emitting properties. That plant reportedly has lost money for five years in a row.
Elsewhere, Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia) is seeking financial aid for its two-unit, 2,111-MW Millstone nuclear plant in Connecticut. For more on that, see July 27, 2017, article - Fate of Millstone Hangs Over Connecticut and New England. In New Jersey, Public Service Enterprise Group Incorporated (NYSE:PEG) (Newark, New Jersey) is seeking financial support to keep its two nuclear plants in the state running. For more on that, see September 11, 2017, article - Will Nuclear Nor'easter Roil New Jersey's Electric Market?
Back in Ohio, American Electric Power Corporation (NYSE:AEP) (Columbus, Ohio) has two main things it would like to see from the Ohio lawmakers: a legislative fix for power plants owned by the Ohio Valley Electric Corporation (OVEC) (Piketon, Ohio), of which AEP is the 39% owner, and clarification of state laws governing "advanced generation," according to AEP spokesperson Scott Blake.
OVEC operates two large coal-fired power plants that were built decades ago to supply a federal nuclear enrichment facility at Portsmouth, Ohio. That facility is closed but the OVEC owners are committed to take power from the two plants until 2040. The plants, Kyger Creek Generating Station in Cheshire, Ohio, and Clifty Creek Power Station in Madison, Indiana, have combined generating capacity of about 2,400 megawatts (MW).
Currently, AEP has to go to the Public Utilities Commission of Ohio (PUCO) (Columbus, Ohio) every three years to recover its costs in the OVEC facilities. The utility would like a legislative solution that automatically recovers costs (or rebates excess costs collected) from customers through 2040, rather than go to its regulators every three years to recover those costs. "We're asking the legislature to give us a mechanism to recover costs associated with the OVEC plants," Blake said in an interview.
But the bill AEP supports, H.B. 239, has been opposed by, among others, the Sierra Club and the Ohio Legislative Service Commission (Columbus), the legislature's non-partisan legislative analytic service. It said the bill would guarantee Ohio utilities automatic recovery of up to $256.6 million in costs for the 24-year period from 2017 to 2040, when the contracts are scheduled to end. The bill also is opposed by the Ohio Consumers' Counsel (Columbus), the consumer-protection agency that advocates on electric issues on behalf of residential consumers.
OVEC's other owners include units of Buckeye Power Incorporated (Columbus), Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina), AES Corporation (NYSE:AES) (Arlington, Virginia), FirstEnergy, PPL Corporation (NYSE:PPL) (Allentown, Pennsylvania), Wolverine Power Supply Cooperative Incorporated (Cadillac, Michigan) and Vectren Corporation (NYSE:VVC) (Evansville, Indiana).
Another cluster of issues involves renewable power. AEP would like legislative clarity on whether distribution utilities could own what it called "advanced generation assets," a term that would mostly apply to renewable energy but could also apply to high-efficiency natural gas combined cycle (NGCC) generation, Blake said. Late last year AEP's Ohio distribution utility, AEP Ohio, said it wanted to build up to 900 MW of renewable generation--500 MW of wind power and 400 MW of solar power--in the Buckeye State.
"We'd like to get legislative clarity on a distribution utility's ability to invest in renewable energy," Blake told Industrial Info, adding there is no specific bill addressing that as yet. If the state legislature doesn't approve something on this, Blake said the corporate parent could decide to own those assets: "We're open to a number of ownership scenarios on renewable energy." The planning for these renewable energy assets, which would be dedicated to AEP's Ohio customers, has not progressed to the point where specific projects and sites have been identified, he added.
The American Wind Energy Association (AWEA) (Washington, D.C.) would like Ohio lawmakers to modify a set-back requirement adopted a few years ago that it said has throttled wind power development in Ohio in recent years.
Earlier this year, the Ohio State Senate passed a bill modifying those set-backs to bring them into alignment with rules set up by the federal government and other states, but the state House has not yet passed companion legislation. In a statement earlier this year, AWEA said the set-backs, "adopted in 2014 with no public debate ... are among the country's most restrictive and have essentially functioned as a ban on wind development."
Speaking about the House's failure to date to pass companion legislation earlier this year, Andrew Gohn, AWEA's Eastern region policy director, said, "House lawmakers turned their backs on Ohio's businesses and rural communities with this decision. It's hard to understand why the Ohio House under the leadership of Speaker Rosenberger would stand in the way of $4.2 billion dollars of economic development."
Gohn went on to say the state's business community is trying to make Ohio more attractive for companies wishing to power their facilities with renewable energy. AWEA estimated the wind power industry has attracted $1.1 billion of investment into Ohio and supports more than 3,000 in-state jobs.
In 2014, Ohio lawmakers put a two-year freeze on renewable energy and energy efficiency when they voted to suspend the state's Clean Energy Standard, which set forth specific levels of renewables and energy efficiency that utilities were obligated to meet. That standard has been revived, but various parties are trying to revisit the state's renewable power law, some want to kill it, others want to expand it, and still others want to make it more profitable for utilities to invest in green power.
Ohio's current legislative session is resuming in the wake of the Trump administration refusal last month to invoke a federal emergency measure to temporarily exempt the state's coal-fired power plants from federal environmental regulations. President Trump reportedly committed to use those powers in private conversations with executives from FirstEnergy and Murray Energy Corporation (St. Clairsville, Ohio) this summer. But the Department of Energy (DoE) (Washington, D.C.) and the White House later decided it did not need to invoke this rarely-used provision of the Federal Power Act that would keep power plants operating in emergencies that threatened the nation's electric supply, according to a report by the Associated Press.
"Governor John Kasich and the Ohio Senate have been supporters of clean energy, opponents of bad energy policy and advocates for bringing more renewable energy and energy efficiency to the state," Jen Miler, director of the Sierra Club of Ohio, said in an interview. "The real problem has been the Ohio House, and particularly House Majority Floor Leader Bill Seitz. In 2014, he was the driving force behind the two-year suspension of the state's Clean Energy Standards. And at one point in the budget debates earlier this year, he threatened to shut down the state government rather than modify the state's wind power setbacks."
"As it relates to electricity matters, it looks like the Ohio legislature will have an active Fall session," commented Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "In many ways, Ohio is Ground Zero in the transformation of the electricity business, with uneconomic nuclear generation fighting to stay open, closure of coal-fired generation, and growth of renewable and gas-fired generation."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
FirstEnergy Corporation (NYSE:FE) (Akron, Ohio) will resume its push for financial support for its two uneconomic nuclear power plants, Davis-Besse and Perry. FirstEnergy spokesperson Jennifer Young told Industrial Info "nothing has changed" with the utility's request for about $300 million per year for a period of 16 years to compensate the utility for the non-emitting characteristic of its nuclear pants. "We continue to meet with people and talk about the importance of nuclear in Ohio," she said.
Even though FirstEnergy may try to sell its nuclear plants, it wants to be compensated up to about $5.28 billion for owning them. The company's effort to secure that financial support earlier this year was met by howls of protest from environmental and consumer groups as well as competing merchant power plant owners. For more on that issue, see May 30, 2017, article - Down but Not Out? FirstEnergy Still Seeking $300 Million Per Year in Nuclear Support and March 30, 2017, article - Will FirstEnergy Achieve ZEN for its Ohio Nuclear Plants?
FirstEnergy is trying to follow in the footsteps of Exelon Corporation (NYSE:EXC) (Chicago, Illinois), which was able to secure huge amounts of financial support to keep uneconomic nuclear plants open in Illinois and New York. For more on that, see December 20, 2016, article - Exelon Wins Financial Aid for Two Uneconomic Nuclear Plants and August 3, 2016, article - Cash on the Barrel: New York Clean Energy Standard Includes Multibillion-Dollar Support for Nuclear Power's Carbon-Free Generation. Exelon has said it will close its Three Mile Island Nuclear Generating Station in Pennsylvania unless it receives financial support that recognizes nuclear non-emitting properties. That plant reportedly has lost money for five years in a row.
Elsewhere, Dominion Energy Incorporated (NYSE:D) (Richmond, Virginia) is seeking financial aid for its two-unit, 2,111-MW Millstone nuclear plant in Connecticut. For more on that, see July 27, 2017, article - Fate of Millstone Hangs Over Connecticut and New England. In New Jersey, Public Service Enterprise Group Incorporated (NYSE:PEG) (Newark, New Jersey) is seeking financial support to keep its two nuclear plants in the state running. For more on that, see September 11, 2017, article - Will Nuclear Nor'easter Roil New Jersey's Electric Market?
Back in Ohio, American Electric Power Corporation (NYSE:AEP) (Columbus, Ohio) has two main things it would like to see from the Ohio lawmakers: a legislative fix for power plants owned by the Ohio Valley Electric Corporation (OVEC) (Piketon, Ohio), of which AEP is the 39% owner, and clarification of state laws governing "advanced generation," according to AEP spokesperson Scott Blake.
OVEC operates two large coal-fired power plants that were built decades ago to supply a federal nuclear enrichment facility at Portsmouth, Ohio. That facility is closed but the OVEC owners are committed to take power from the two plants until 2040. The plants, Kyger Creek Generating Station in Cheshire, Ohio, and Clifty Creek Power Station in Madison, Indiana, have combined generating capacity of about 2,400 megawatts (MW).
Currently, AEP has to go to the Public Utilities Commission of Ohio (PUCO) (Columbus, Ohio) every three years to recover its costs in the OVEC facilities. The utility would like a legislative solution that automatically recovers costs (or rebates excess costs collected) from customers through 2040, rather than go to its regulators every three years to recover those costs. "We're asking the legislature to give us a mechanism to recover costs associated with the OVEC plants," Blake said in an interview.
But the bill AEP supports, H.B. 239, has been opposed by, among others, the Sierra Club and the Ohio Legislative Service Commission (Columbus), the legislature's non-partisan legislative analytic service. It said the bill would guarantee Ohio utilities automatic recovery of up to $256.6 million in costs for the 24-year period from 2017 to 2040, when the contracts are scheduled to end. The bill also is opposed by the Ohio Consumers' Counsel (Columbus), the consumer-protection agency that advocates on electric issues on behalf of residential consumers.
OVEC's other owners include units of Buckeye Power Incorporated (Columbus), Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina), AES Corporation (NYSE:AES) (Arlington, Virginia), FirstEnergy, PPL Corporation (NYSE:PPL) (Allentown, Pennsylvania), Wolverine Power Supply Cooperative Incorporated (Cadillac, Michigan) and Vectren Corporation (NYSE:VVC) (Evansville, Indiana).
Another cluster of issues involves renewable power. AEP would like legislative clarity on whether distribution utilities could own what it called "advanced generation assets," a term that would mostly apply to renewable energy but could also apply to high-efficiency natural gas combined cycle (NGCC) generation, Blake said. Late last year AEP's Ohio distribution utility, AEP Ohio, said it wanted to build up to 900 MW of renewable generation--500 MW of wind power and 400 MW of solar power--in the Buckeye State.
"We'd like to get legislative clarity on a distribution utility's ability to invest in renewable energy," Blake told Industrial Info, adding there is no specific bill addressing that as yet. If the state legislature doesn't approve something on this, Blake said the corporate parent could decide to own those assets: "We're open to a number of ownership scenarios on renewable energy." The planning for these renewable energy assets, which would be dedicated to AEP's Ohio customers, has not progressed to the point where specific projects and sites have been identified, he added.
The American Wind Energy Association (AWEA) (Washington, D.C.) would like Ohio lawmakers to modify a set-back requirement adopted a few years ago that it said has throttled wind power development in Ohio in recent years.
Earlier this year, the Ohio State Senate passed a bill modifying those set-backs to bring them into alignment with rules set up by the federal government and other states, but the state House has not yet passed companion legislation. In a statement earlier this year, AWEA said the set-backs, "adopted in 2014 with no public debate ... are among the country's most restrictive and have essentially functioned as a ban on wind development."
Speaking about the House's failure to date to pass companion legislation earlier this year, Andrew Gohn, AWEA's Eastern region policy director, said, "House lawmakers turned their backs on Ohio's businesses and rural communities with this decision. It's hard to understand why the Ohio House under the leadership of Speaker Rosenberger would stand in the way of $4.2 billion dollars of economic development."
Gohn went on to say the state's business community is trying to make Ohio more attractive for companies wishing to power their facilities with renewable energy. AWEA estimated the wind power industry has attracted $1.1 billion of investment into Ohio and supports more than 3,000 in-state jobs.
In 2014, Ohio lawmakers put a two-year freeze on renewable energy and energy efficiency when they voted to suspend the state's Clean Energy Standard, which set forth specific levels of renewables and energy efficiency that utilities were obligated to meet. That standard has been revived, but various parties are trying to revisit the state's renewable power law, some want to kill it, others want to expand it, and still others want to make it more profitable for utilities to invest in green power.
Ohio's current legislative session is resuming in the wake of the Trump administration refusal last month to invoke a federal emergency measure to temporarily exempt the state's coal-fired power plants from federal environmental regulations. President Trump reportedly committed to use those powers in private conversations with executives from FirstEnergy and Murray Energy Corporation (St. Clairsville, Ohio) this summer. But the Department of Energy (DoE) (Washington, D.C.) and the White House later decided it did not need to invoke this rarely-used provision of the Federal Power Act that would keep power plants operating in emergencies that threatened the nation's electric supply, according to a report by the Associated Press.
"Governor John Kasich and the Ohio Senate have been supporters of clean energy, opponents of bad energy policy and advocates for bringing more renewable energy and energy efficiency to the state," Jen Miler, director of the Sierra Club of Ohio, said in an interview. "The real problem has been the Ohio House, and particularly House Majority Floor Leader Bill Seitz. In 2014, he was the driving force behind the two-year suspension of the state's Clean Energy Standards. And at one point in the budget debates earlier this year, he threatened to shut down the state government rather than modify the state's wind power setbacks."
"As it relates to electricity matters, it looks like the Ohio legislature will have an active Fall session," commented Britt Burt, Industrial Info's vice president of research for the Global Power Industry. "In many ways, Ohio is Ground Zero in the transformation of the electricity business, with uneconomic nuclear generation fighting to stay open, closure of coal-fired generation, and growth of renewable and gas-fired generation."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
