Energy

This week, the OMA provided testimony in support of House Bill 15 to the House Energy Committee. The OMA applauded the bill sponsor for including repeal of anti-competitive, costly provisions embedded in current law that customers must pay through electric security plans, as well as repeal of the subsidies paid by customers to provide hundreds of millions of dollars to two coal plants owned by Ohio Valley Electric Corporation (OVEC).

In testimony, as well as in a statement, the OMA also emphasized that more can be done to help increase the benefits of competition. More transparency on the true costs and effectiveness of utilities’ transmission system improvements is needed, as well as the creation of “heat maps” to show where Ohio’s transmission grid network is over or underused, allowing businesses to expand where there is surplus capacity.

Along with the OMA, the committee received testimony from over 20 proponents of the bill at the hearing. 2/12/2025

This week, the House Energy Committee began its review of House Bill 15, an energy reform package designed to encourage generation in Ohio. Among the bill’s many provisions, it eliminates electric security plans (ESPs), a mechanism used by electric utilities to increase profits through numerous above-market charges added to customers’ bills. Instead, the bill requires an electric utility’s standard service offer to be established only as a market-rate offer.

The bill also clarifies that electric utilities cannot own or operate generation, and repeals the subsidy that requires Ohioans to pay for two uneconomic coal-fired power plants.

The Senate has not yet unveiled its energy legislation, Senate Bill 2. 2/5/2025

Former Ohio House Speaker Larry Householder’s attorneys made their arguments to a three-judge appeals court panel this week in an attempt to overturn his racketeering conviction. Householder’s attorney argued that his actions in the passage of House Bill 6 were “regular politics” and that jurors were given faulty instructions that led them to believe political contributions for an energy bill supported by Householder were a federal crime.

Householder’s attorney also noted that he will not be seeking clemency from Trump, an option that he had previously considered after Trump’s re-election. 2/3/2025

Last week, the PUCO Nominating Council interviewed several candidates to fill a vacancy on one of Ohio’s most powerful regulatory boards.

The Council voted to recommend two candidates for Commissioner to the Governor; the incumbent Lawrence Friedeman, who has held the seat since 2017, and former Greater Cleveland Partnership CEO Joe Roman.

The Governor has 30 days to appoint a Commissioner from the list or reject the list. 2/5/2025

Chinese artificial intelligence company DeepSeek’s claims of fractional energy needs as compared to American rivals doused cold water on calls for major electricity investments.

The market correction followed a prescient op-ed from the President of the Electric Power Supply Association, warning of irrational exuberance of utility load forecasts, a concern also raised by OMA’s energy experts. With hundreds of billions of dollars of investment at risk, and national security implications, experts are digging in to the poorly understood matter and some just aren’t sure what to think.

Asked for its thoughts, AI standard bearer ChatGPT stated, “Future AI energy needs will likely grow but at a more measured pace than early predictions suggested, driven by efficiency gains, specialized hardware, and smarter resource management.” 2/3/2025

PJM, the regional electric grid operator, has agreed to a price cap and price floor for its forthcoming capacity auction. PJM’s capacity auction procures enough power generation for the regional grid through competitive auctions.

Tight electric supply and demand yields higher prices to attract investment in generation, while low prices show an oversupply. However, the recent high prices, set to hit customers this summer, procured no additional connected power capacity. Instead, the high prices reflected questionable rule changes in PJM’s auction, benefitting incumbent generators.

The prospect of even higher prices with little benefit led to a formal complaint from Pennsylvania, which in turn led to the agreement with PJM to collar pricing with a cap and a floor. PJM’s proposed settlement still needs to be approved by its stakeholders, its board, and the Federal Energy Regulatory Commission. 2/3/2025

This week, OMA Managing Directors Lindsey Short and James Lee, along with OMA’s energy engineer, John Seryak, met with the newly appointed Ohio House Energy Chairman Adam Holmes. The OMA staff discussed the importance of affordable, reliable energy to the manufacturing industry while maintaining energy markets free from market manipulation.

The discussion primarily focused on newly introduced House Bill 15, which lays out a plan for significant energy policy reform. Key highlights of the bill include a repeal of electric security plans (ESPs), which have allowed utilities to add riders onto customers’ bills. Another component of the bill is the repeal of OVEC coal-fired power plant subsidies that ratepayers are currently on the hook for.

Attend the March 13 OMA Energy Committee for updates on the bill’s progress. 1/27/2024

Extreme cold surged through the Midwest early this week, putting significant strain on grids across the nation. Ohio’s, however, managed its peak demand, avoiding blackouts and even rerouting surplus power to other areas of the country.

OMA President Ryan Augsburger highlighted the success of the free market in generating enough power to meet demand in a statement, noting that while there is still room for improvement in transmission transparency, Ohio’s free market for electricity can and will meet future demand for electricity. 1/23/2024

American Electric Power has agreed to pay $19 million to settle with the Securities and Exchange Commission after regulators accused the company of misleading investors about its involvement in the House Bill 6 scandal. AEP had previously claimed to investors and the public that neither the company nor its subsidiaries ever contributed to a “dark money” nonprofit controlled by former Speaker Larry Householder, however tax records showed $1.2 million in contributions to two Householder-controlled groups.

In settling with the SEC, AEP doesn’t admit or deny the SEC’s findings. 1/22/2024

A recent ruling from the U.S. Court of Appeals will save AEP Ohio and AES Ohio ratepayers hundreds of millions of dollars on their electric bills. The ruling stemmed from a complaint made by the Ohio Consumers’ Counsel.

At issue was whether Ohio’s electric utilities could receive an “adder”, essentially a bump-up on their regulated profits from owning electric transmission lines, for being a member of the PJM Regional Transmission Organization. The adder was intended as an incentive for monopoly electric utilities to join regional electric markets.

However, Ohio requires our utilities to join regional markets by law, rendering the incentive meaningless and unlawful. The case highlights yet again how millions of dollars of costs can be buried and hidden in electric bills, with no benefit to the customer. 1/22/2024

AEP recently announced that it will sell 19.9% equity interest in AEP Ohio Transmission and AEP Indiana Michigan Transmission to private equity firm KKR and Canada’s Public Sector Pension Investment Board. The equity stake KKR and PSP are buying represents approximately 5% of AEP’s total transmission rate base. The sale will offset some of AEP’s $5.35 billion equity financing needs through 2029, the company said.

The deal is expected to close in the second half of this year. 1/15/2024

Ohio Speaker of the House Matt Huffman this week said he was confident that the incoming Trump administration “eases up on the ability of Ohio and other states” to choose how they power their grids.

Huffman ranked energy production in the state as one of his top priorities this week, with both he and his counterpart in the Senate, Rob McColley, creating stand-alone energy committees. 1/14/2024

Debate continues on AEP Ohio’s controversial proposed data center tariff at the Public Utilities Commission of Ohio. AEP Ohio, which has a legal obligation to serve customers in a non-discriminatory manner, started the controversy with a self-imposed and unapproved moratorium on new data center development in Ohio. However, testimony revealed this week that AEP Ohio does in fact have electric capacity to serve data centers in certain regions in Ohio.

OMA energy experts from Runnerstone have raised concerns about AEP Ohio’s lack of proof of limitations to serve the customers and have warned of the potential for billions of dollars in additional and unneeded electricity costs that would be billed to Ohio’s manufacturers and other customers.

The case, regarded as a bellwether for other states to follow, comes as data center development takes to the national stage – President-elect Trump announced billions in private investment in data centers this week, including in Ohio. 1/6/2024

Newly anointed Senate President Rob McColley and House Speaker Matt Huffman have both signaled that energy policy will be on their list of priorities to address this year. Speaker Huffman commented that he views the way that energy is created, distributed, and paid for is outdated.

These comments have been made as it is rumored President McColley and Speaker Huffman have been working together on a comprehensive plan for more energy creation. This plan has not yet been unveiled. Speaker Huffman has noted that they will be looking at solutions to provide energy other than taking money from ratepayers.1/6/2024

National Association of Manufacturers President and CEO Jay Timmons recently commented on new guidance published by the U.S. Department of Treasury for the hydrogen production tax credit.

Timmons noted that while hydrogen production facilities will allow the U.S. to add more sources of energy, additional restrictions should be addressed to make it more cost-competitive on a global scale.1/6/2024

Google has announced the launch of a new fund to enhance Ohio’s electric grid and noted that the company will work with business leaders and government officials across the state.

It will focus on reducing electricity costs for low-income residents, improving grid reliability, and supporting energy workforce development, although no specific initiatives for the fund have been determined yet. 1/9/2024

The costs that Ohioans are paying to subsidize the uneconomic OVEC coal-fired power plants continue to pile up. OMA’s energy engineering consultant, RunnerStone LLC, has reported that Ohio’s electric utilities are forecasting the OVEC coal-fired power plants to lose $53.9 million in the first half of 2025. This brings a total of $80.6 million subsidized by Ohio’s ratepayers in just the first half of 2025.

Based on historical and predicted future electricity prices, RunnerStone estimates Ohioans could subsidize OVEC’s utility owners over $1.1 billion total by 2030. 12/19/2024

This week, thanks to advocacy efforts by the OMA, the Senate Energy and Public Utilities Committee failed to vote on House Bill 79, an electric utility giveaway disguised as an energy efficiency program.

House Bill 79 would have allowed utilities to override and shut down manufacturer-owned electric generation. It also would have allowed utilities to charge customers back for the costs that a customer’s efficiency investments just saved. 12/18/2024

Ohio Congressman Troy Balderson (OH-12) was recently selected to be Chairman of the House Energy Action Team (HEAT), whose mission is topropose and promote policy solutions surrounding U.S. energy independence.

HEAT is a coalition of House Republicans tasked with promoting American-focused energy policy priorities, including initiatives to increase affordability, increase U.S. power generation, and strengthen U.S. national security. 12/17/2024

This week, the OMA provided testimony to the Senate Energy and Public Utilities Committee to express concern with an electric utility giveaway disguised as an energy efficiency program. Under House Bill 79, electric utilities are given new authority to control renewable energy plants they do not own, including the ability to override and shut down competitively owned generation without the owner’s consent.

The OMA will be closely monitoring this bill throughout the last week of the legislative session, which is scheduled to wrap up by the end of next week. 12/10/2024