Energy

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 Speaker Huffman commented that he views the way that energy is created, distributed, and paid for is outdated.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

According to bond rating agency Fitch, the coal-fired power plants owned by Ohio Valley Electric Corp. (OVEC) are no closer to profitability. Fitch gave the OVEC bonds a BBB rating, on the lower end of the fourth tier of ratings, which range from AAA to D. Despite this forecast, Ohio electric ratepayers are required to subsidize the operations of the company’s power plants to benefit its utility ownership.

Ohio customers should not be on the hook to keep uneconomic power plants afloat. The OMA has continually called for repeal of the HB 6 OVEC subsidies, which OMA’s energy engineering firm, RunnerStone, has calculated could subsidize OVEC’s utility owners over $1 billion by 2030. 12/10/2024

The Summit County Prosecutor’s office announced this week that former PUCO Chairman Sam Randazzo’s company, Sustainability Funding Alliance of Ohio (SFA-Ohio), plead guilty to various felonies that took place between 2010 and 2021. The felonies include engaging in a pattern of corrupt activity, telecommunications fraud, aggravated theft, and money laundering. The SFA-Ohio along with the Industrial Energy Users of Ohio, also previously operated by Randazzo, will pay as much as $2.26 million in penalties and restitution.

Randazzo was previously charged, but those charges were dismissed after he died by suicide. 12/3/2024

This week, the Public Utilities Commission of Ohio began hearings on the AEP Ohio proposed data center tariff. The OMA Energy Group has intervened in what has become a contentious case seeking to penalize large electricity users.

The proposed tariffs are discriminatory, seeking to create a new class of customers based on industry type without evidence of need. After three days of hearings, AEP Ohio’s proposal is clear in its goal – to construct or have its affiliate construct a multi-billion dollar transmission line of dubious need that would be paid for by Ohio manufacturers and other customers.

OMA Energy Group has cautioned against setting a precedent which could punish energy intensive users in the state or trigger costly grid upgrades without demonstrating need or exploring less expensive alternatives.

The hearings are expected to continue for the next few weeks. 12/3/2024

This week, the OMA provided interested party testimony to the Senate Energy and Public Utilities Committee on Senate Bill 275, sponsored by Sen. Matt Dolan, to create a virtual net-metering mechanism for local generation sited at brownfields and other similarly affected properties.

While the OMA supports the premise of the bill to allow many types of eligible electric generation technologies for virtual net-metering, the current language allows for shifting of benefits. The OMA has suggested that the bill be amended to include language that ensures the savings accrued by a project would go back to the customer whose investment produced the savings. 11/20/2024

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