Energy

Unsubstantiated claims of a constrained electric grid continue to fuel the electric utilities’ push for re-regulation of generation. While many are questioning the reliability of Ohio’s power grid, there has been a lack of data presented to support any such arguments. In fact, load has been down for all four of Ohio’s public utilities. This lack of transparency has created fear in the marketplace and allowed utilities to paint whatever picture they choose about the state of Ohio’s electricity market needs.

Utilities are pushing for a return to a so-called “vertically integrated structure” which is simply reregulation in sheep’s clothing. This narrative seeks to put customers on the hook so that they can once again monopolize generation, despite poor management of their current regulated transmission and distribution systems.

It is critical for manufacturers to stay engaged to protect competitive markets. Join the Ohio Customers for Affordable Reliable Power coalition now to empower customers in the fight against re-regulation. 11/13/2024

This week, the OMA held its final Energy Committee of the year, highlighting the ongoing threat of reregulation, skyrocketing transmission spending, and PJM’s continued delays to capacity auction.

Committee members were also briefed on the proposed tariff at the PUCO against data centers, which the OMA has warned is a potential “slippery slope” that could be used to penalize energy-intensive users in the future. 11/7/2024

This week, the OMA hosted the first meeting of the Ohio Customers for Affordable Reliable Power (OCARP). OCARP was formed to defend competitive power generation, free markets, and protect customers in the face of energy reregulation.

Amidst the push by the utilities to scrap competition and rebuild monopolies, lax regulation and bad decision-making from the grid operator, manufacturers must stick together with other consumer advocates and fight for the right policies. Learn more about OCARP and the need to protect competitive generation in Ohio. 11/7/2024

Electricity prices are set to increase next summer as a result of higher electric generation costs in regional grid operator PJM’s capacity auction. However, almost every resource type cleared more power in the auction — more coal, gas, nuclear, solar, and wind.

Why the increase in electricity prices if electric supply is steady? This memo from OMA energy engineering consultant Runnerstone found that the cost increases are primarily due to auction rule changes made by PJM, and power plant owners withholding their generation from the lucrative auction, rather than supply and demand fundamentals.

Runnerstone shows that 183 gigawatts of connected generation cleared the high-priced auction, an increase from the previous year. The cost to customers will be in the billions of dollars, according to PJM’s Independent Market Monitor. 10/17/2024

Veteran state representative Bill Seitz (R, Cincinnati) this week sounded the alarm to conference-goers that the power grid would soon collapse without legislation to reverse Ohio’s deregulation of electric generation, according to Hannah statehouse news.

Calls for reregulation have been mounting with scant evidence of a good justification to abandon markets. The OMA agrees that future shortfall risks should be taken seriously, but the rumored growth projections are overstated, and they’re being used to justify expensive investments that utilities will pass onto their customers without corresponding benefits. Deregulation, while imperfect, is still providing considerable untapped potential for Ohio’s manufacturers and the economy.

Manufacturers are invited to the upcoming OMA Energy Committee meeting on Nov. 7.10/22/2024

Last week, the OMA issued a statement in response to AEP Ohio’s proposal at the Public Utilities Commission of Ohio (PUCO) to establish a new rate class for data centers.

The proposal would create two new classes of customers without evidence of need and without a proper cost of service study, setting a discriminatory precedent against one business type. The OMA Energy Group has filed testimony in the case urging the PUCO to reject AEP Ohio’s proposal, which is unreasonable and anti-competitive. 10/17/2024

Customers were hammered in the most recent auction results announced in late July, seeing a ninefold price increase in the capacity component of power bills, redistributing billions from customers to certain power generators. Unless PJM revises the rules, customers could see even greater price spikes at the upcoming December auction. PJM has announced its intent to again delay the December auction in order to revise the auction rules.

Utility Dive reported on how competitive generators generally support the delay and rule changes, while Ohio-based FirstEnergy instead is calling for “new solutions”, empowering states to determine generation needs instead of the marketplace. Replacing the market with government would be a form of reregulation of generation.

The OMA has a longstanding position favoring markets over government picking winners and losers. Join the discussion at the OMA Energy Committee meeting on Nov. 7.10/17/2024

The regional electric grid operator, PJM, has requested the Federal Energy Regulatory Commission (FERC) to delay its capacity auction to procure new power generation yet again. Timely capacity auctions are critical to procure new power plants to replace retiring power plants.

PJM’s capacity auctions have been delayed for years, exacerbating power supply worries, especially when combined with PJM’s backlogged interconnection queue for new generation, rated among the nation’s worst. PJM’s delay comes amidst a FERC complaint and multiple challenges that its auction rules are creating paper-only supply shortages – driving up customer costs by billions with no reliability improvement. 10/14/2024

AEP Ohio’s proposal at the Public Utilities Commission of Ohio (PUCO) to establish a new rate class for data centers has seen recent activity over the past week.

The proposal would create two new classes of customers without evidence of need and without a proper cost of service study, setting a discriminatory precedent against one business type. The OMA Energy Group has filed testimony in the case urging the PUCO to reject AEP Ohio’s proposal, which is unreasonable and anti-competitive.

As part of a customer coalition, OMA Energy Group filed a joint settlement before the PUCO last week to resolve the proposal. While the majority of parties involved in the case supported the settlement, AEP Ohio has urged the PUCO to reject it.

OMA Energy Group members will be provided with a memo on the joint settlement.

FirstEnergy and AEP announced this week they are teaming with Dominion Energy Virginia to propose building transmission lines across Ohio, West Virginia, and Virginia.

The announcement comes as a result of PJM’s Regional Transmission Expansion Planning (RTEP) process, which identifies high voltage transmission solutions to regional power constraints. PJM planning documents show Ohio and AEP are positioned to export power through West Virginia to the Washington DC area, where many data centers cluster, if new transmission lines are built.

The announcement has caught attention locally, as it appears to contradict these same utilities’ claims of a local power shortage, while positioning Ohio to export its electricity out of state.10/9/2024

Congressman Troy Balderson (OH-12) recently introduced OMA-supported legislation to enable grid operators to fast-track consideration of power generation projects, the Guaranteeing Reliability through the Interconnection of Dispatchable (GRID) Power Act.

Under the GRID Power Act, the Federal Energy Regulatory Commission would have 60 days to review proposals from regional transmission organizations and independent system operators for specific projects that would be pushed to the head of interconnection queues. 9/27/2024

Todd Snitchler, President and CEO of The Electric Power Supply Association (EPSA), recently provided a keynote address at the Ohio Manufacturers’ Energy Conference emphasizing the power of markets and lambasting calls for reregulation of electric generation.

In his presentation, Snitchler highlighted why markets are best and addressed how the utility demand growth story is being manipulated to make an argument for pro-regulation at the expense of captive customers. 10/3/2024

PJM’s Independent Market Monitor published a study revealing that recent rule changes will cost customers $4.4 billion in the latest capacity auction. Dr. Joe Bowring, the Market Monitor, along with OMA energy consultant RunnerStone, explained at last week’s OMA Energy Conference that the rising power prices result not from a decrease in electric generation supply but from these administrative changes.

The study also identified market power issues, where power companies exploit a loophole to withhold renewable energy and battery storage capacity, artificially inflating prices for other thermal plants they own. This tactic allows generators to gain $4.1 billion at customers’ expense, raising significant concerns about transparency and quality that the OMA has previously highlighted to PJM’s board. 9/24/2024

PJM recently closed its transmission planning window for 2029-2032 and “did not identify new needs” for transmission expansion in AEP or FirstEnergy’s Ohio territory as part of its Regional Transmission Expansion Plan (RTEP). AEP has already secured permission for a $33 million transmission line in central Ohio, set to be completed by June 2027, aimed at accommodating anticipated load increases from data centers. AEP is collecting substantial ratepayer funds to upgrade its system in expectation of this electric load.

Additionally, PJM projects a significant increase in generation within AEP’s territory and across Ohio, with plans to export electricity to the East Coast by 2028. However, any revisions to AEP’s load forecasts could alter this outlook. The Ohio Manufacturers’ Association Energy Group has intervened in the Public Utilities Commission of Ohio to examine potential changes to AEP’s load forecasts, highlighting the need for scrutiny in this evolving landscape. 9/24/2024

This week, the Ohio Manufacturers’ Association hosted the third annual Energy Conference at the Quest Conference Center in Westerville, drawing manufacturers, stakeholders, energy experts, and lawmakers to discuss energy policy and best practices in energy management.

United States Secretary of Energy Jennifer Granholm addressed the conference via video, highlighting the key investments by the federal government in manufacturing and energy production.

“This state is at the heart of our nations economy,” Granholm said. “Ohio and the industrial Midwest are leading the pack…in manufacturing.”

Panels and presentations included discussions on energy markets, transmission costs and reliability, and energy regulation.

“The OMA believes in the power of markets, that’s part of the reason for this conference,” said John Seryak, CEO of RunneStone. “That’s why so many energy experts, industry leaders, and stakeholders are here. We believe in markets and competition.” 9/19/2024

At the Ohio Manufacturers’ Energy Conference this week, PJM’s Independent Market Monitor, Dr. Joseph Bowring critiqued the RTO for administrative rule changes that will increase electricity priced by billions of dollars per year.

Bowring also expressed his support for competitive energy markets and highlighted areas where PJM could lower costs for consumers and attract generation. 9/19/2024

The keynote speaker at the Energy Conference, former PUCO Chairman Todd Snitchler, reinforced the strength of competitive energy markets and shed light on false claims of an energy shortfall in order to justify the argument for reregulation.

“Collaboration and open, fact-based discussions are key for overturning the utilities reregulation argument,” Snitchler said. “Competition encourages innovation, frees consumers, and pushes improvement. Now is the time to stay the course on competitive energy markets.” 9/19/2024

FirstEnergy Corp. has been ordered by the U.S. Securities and Exchange Commission to pay a $100 million civil penalty for misleading investors about its role in the House Bill 6 scandal. The SEC found that FirstEnergy Corp. violated antifraud provisions by misrepresenting its role in HB 6 and failing to disclose payments related to the political corruption scheme.

This settlement follows the agreement reached in August for FirstEnergy to pay $19.5 million to the Ohio Attorney General’s Office and set aside $500,000 for an independent consultant to review FirstEnergy’s ethics policies. 9/13/2024

PJM continues to make changes to its capacity auction construct and recently wrapped up a stakeholder process reviewing the participation of energy efficiency in the capacity market. A supermajority of stakeholders agreed with a consensus position that energy efficiency should be removed from consideration in the next base residual auction, which is set for this December. Energy efficiency accounted for less than 1% of resources cleared in PJM’s most recent auction. 9/5/2024

Middle River Power will continue to operate a 540-MW gas-fired power plant rather than proceed with a planned retirement, likely due to increased revenue from PJM’s capacity market. In its 2023 State of the Market Report, PJM’s Independent Market Monitor suggested that a doubling of market revenues would reduce units identified as uneconomic by 44%, close to ~15 GW of generation. Analysts are predicting that capacity prices could continue to rise, potentially hitting the price cap, which would incentivize many more power plants to continue to operate. 9/5/2024