©2015 E&E Publishing, LLC
Republished with permission
By Rod Kuckro
Despite Ohio’s antipathy toward U.S. EPA’s proposed Clean Power plan, under no circumstances do state regulators want the General Assembly to pass any law that would interfere with eventual compliance.
“We do not think that the plan is legal, and we have mounted a legal challenge,” said Asim Haque, vice chairman of the Public Utilities Commission of Ohio. “This is in fact an energy policy.”
The PUCO, Ohio Environmental Protection Agency, Gov. John Kasich and Attorney General Mike DeWine “are all on the same page,” he said.
“However, we want to be as constructive in shaping the final rule as possible,” he said in an interview yesterday in Washington, D.C.
Energy savings at the Cleveland Clinic free up resources for patient care. (Photo by Steve Grant via Creative Commons)
Representatives of the U.S. Department of Energy and the City of Cleveland were on hand Monday at the city’s Fire Station No. 1 to recognize local leaders in DOE’s Better Buildings Challenge.
Participants in the federal program publicly commit to decrease their energy consumption by at least 20 percent over a 10-year period and to share their know-how with others. Energy efficiency is a key part of the U.S. Environmental Protection Agency’s proposed Clean Power Plan.
Monday’s program gave kudos to both the Cleveland Division of Fire and the Cuyahoga Metropolitan Housing Authority for reducing energy consumption and cutting costs for area taxpayers.
Also honored were the commercial real estate company Forest City Enterprises and the Cleveland Clinic. Both organizations have their headquarters in Cleveland.
Firefighters from around Ohio fight a derrick fire during a training session at Wayne County Fire and Rescue Training Facility in 2008. (AP Photo/Mike Cardew/Akron Beacon Journal)
Ohio’s oil and gas industry and environmental groups are satisfied with a compromise reached this week on one bill before the state legislature, but both camps remain divided on controversial community right-to-know provisions in another pending bill.
Gov. John Kasich’s House budget bill, House Bill 64, would exempt oil and gas operations from providing hazardous chemical information directly to local authorities and emergency responders.
Critics say those provisions conflict with federal community right-to-know requirements. Similar terms were proposed last year.
HB 64 also renews efforts to raise taxes on oil and gas operations. The industry opposes those provisions.
A proposal from FirstEnergy would guarantee income for the Davis-Besse nuclear plant and other facilities. (Photo by AlienCG via Creative Commons)
As FirstEnergy awaits a decision on its proposed electric security plan after a similar proposal from American Electric Power (AEP) was rejected by regulators last month, broader themes about Ohio’s energy future are emerging in the debate.
The plan recommended by FirstEnergy would have Ohio electricity consumers pay for operating costs of what critics deem two inefficient power plants; the Davis-Besse nuclear plant near Toledo and the W.H. Sammis coal-fired plant FirstEnergy operates on the Ohio River. An evidentiary hearing on the FirstEnergy proposal is scheduled to be held at the Public Utilities Commission of Ohio (PUCO) offices on April 13.
The PUCO ruled last month that AEP’s similar proposal failed to promote rate stability or overwhelmingly prove that it was in the public interest. Opponents of FirstEnergy’s plan, who have characterized the proposals as “bailouts,” believe it should meet a similar fate.
Critics are raising conflict-of-interest questions about a report warning about reliability risks from the U.S. Environmental Protection Agency’s proposed Clean Power Plan.
The November 2014 report from the North American Electric Reliability Corporation (NERC) claims that putting the EPA’s plan into action could cause instability in the nation’s electric grid, increasing the risks for blackouts.
Officials in Ohio and Indiana, along with coal industry groups, have cited the NERC report in voicing opposition to the Clean Power Plan.
Now the Energy and Policy Institute has alleged there were potential conflicts of interest for Energy Ventures Analysis (EVA), a consultant with ties to a coal technology company that worked on the NERC report.
©2015 E&E Publishing, LLC
Republished with permission
By Ellen M. Gilmer and Mike Lee
Almost three weeks after Ohio’s top court struck down a town’s restrictive drilling ordinances, lawyers and local officials are predicting another round of court cases to settle how much control local governments have over oil and gas development.
The state Supreme Court ruled that the Akron-area town of Munroe Falls could not require Beck Energy Corp. to get separate drilling permits, finding that only the state can issue drilling permits. But it left open whether cities can use zoning to control where drilling happens, and whether the outright drilling bans in some towns can continue to stand.
In the weeks following the highly anticipated decision, attorneys have rushed to interpret how and when that issue will be decided. Will Ohio follow in the footsteps of New York and Pennsylvania, which have preserved some local powers over drilling; follow Colorado and Texas, which have taken a harder line; or chart a new path?
Cathy Kunkel is an IEEFA fellow.
Cross posted from the Institute for Energy Economics and Financial Analysis
By Cathy Kunkel
FirstEnergy’s most recent quarterly numbers and its outlook for 2015 are both dismal and in line with a report we published last fall, “FirstEnergy Seeks a Subsidized Turnaround.”
If anything, FirstEnergy’s problems have only gotten worse since we issued our report:
- FirstEnergy’s net income (revenues less expenses) continues to decline. Here’s the spiral: From $869 million in 2011 to $392 million in 2013 to $299 million in 2014.
- Its earnings per share fell to its lowest point in a decade. Earnings per share in 2014 were $0.51, down from $0.90 in 2013.
- Its long-term debt, already among the highest in the utility industry, increased from $15.8 billion in 2013 to $19.2 billion in 2014, and on its fourth-quarter earnings call, the company’s chief financial officer conceded that the parent holding company is carrying more debt than “we are comfortable with.”
While Ohio regulators last week rejected one utility’s plan to guarantee income for its power plants – characterized by critics as a “bailout” – the decision left the door open for similar proposals in the future.
Meanwhile, protective orders will continue to prevent public disclosure of all the facts and figures behind the plans proposed by utilities.
Last Wednesday the Public Utilities Commission of Ohio (PUCO) rejected a proposal by American Electric Power (AEP) that would have guaranteed sales for AEP’s share of all electricity from two coal plants owned by the Ohio Valley Electric Corporation. All ratepayers would have had to cover the costs of that plan, whether they chose AEP for their electricity generation company or not.
AEP claimed the plan would give ratepayers a hedge against long-term inflation. It described its plan as a Power Purchase Agreement (PPA).
Environmental and consumer advocates have said the plans would impose huge immediate costs on ratepayers with the likelihood of large long-term net losses as well.
The Walter C. Beckjord power plant in Ohio is one of many that have shut down rather than meet pollution rules. (Photo by Brett Ciccotelli via Creative Commons)
A case currently before the Supreme Court could decide whether coal-fired power plants can escape federal rules for mercury and other hazardous air emissions. The case has important consequences for Ohio and other parts of the Midwest.
On the one hand, utilities and other challengers argue that the U.S. Environmental Protection Agency unreasonably failed to consider costs in determining whether the regulations are appropriate.
On the other hand, the U.S. Environmental Protection Agency says the new rules can save tens of billions of dollars in human health costs each year.
Advocates say those amounts and other costs shifted to society are essentially a subsidy for coal-powered electricity.
The Davis-Besse Nuclear Power Station at Oak Harbor, Ohio, would have a guaranteed buyer for all its output if the PUCO approves a FirstEnergy plan. Photo by Kathiann M. Kowalski.
Papers filed last week by FirstEnergy in one of Ohio’s utility “bailout” cases suggest how approval of the plans could potentially give companies an edge in upcoming capacity auctions for the PJM grid area.
The proposals could mean more profits for utilities and their affiliated coal and nuclear plants. It could also mean problems for competitors, including natural gas generation, wind energy, solar power and alternative retail electric suppliers.