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Toledo, Ohio & Lake Erie

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        Mark Stahl, an Ottawa County commissioner, last week told an Ohio senate committee in written testimony that current utility regulations are pushing the state toward a heavy reliance on a single energy source – natural gas – along with subsidized renewable sources.

        Stahl wrote to the senate’s Public Utilities Committee, which is considering a bill that would allow a utility to recover costs for zero-emissions nuclear credits from its customers.

        The economic benefits of the Davis-Besse nuclear power plant are vital to Ottawa County and the region, he wrote.

        “We are already grappling to address the significant reduction in tax revenue from the recent devaluation of the plant,” Stahl wrote. “Closure would mean we have an even bigger gap to fill. Our Ohio utilities are mandated by state law to buy wind and solar credits in significant quantities to serve customers, further distorting the market. Nuclear power, however, is afforded no such luxury – despite the fact that Ohio’s two nuclear plants supply about 90 percent of the state’s clean energy.”

        FirstEnergy Solutions owns the Davis-Besse and Perry nuclear power plants in Ohio and the Beaver Valley nuclear power plant in Pennsylvania. The company also owns two coal-fired plants on the Ohio River.

        Senate Bill 128 creates the Zero-Emissions Nuclear Resource program that requires electric distribution utilities to purchase zero-emissions nuclear credits and recover the purchase costs through a rider imposed on retail electric service customers. The argument behind the program is that the subsidies to nuclear plants are needed to maintain a mix of power sources in the state and support generators with cleaner emissions than coal. Critics of such credits say they reward uncompetitive plants poorly suited for today’s energy needs.

        Stahl, however, contends the current Ohio energy market is distorted.

        “It looks like a market and sounds like a market, but the truth is that Ohio operates under a set of rules where regulators and quasi-government agencies pick the winners and losers in the wholesale electric marketplace,” he wrote. “With the current set of rules Ohio’s power producers must follow, it poses risks to our electric grid. These rules dictate that energy supply decisions be based on the lowest short-term cost, ignoring the long-term considerations that were once analyzed by state utility commissions. They do not consider the value that nuclear power plants deliver to our electric system – a carbon free resource that can reliably operate around the clock with enough fuel on site to operate constantly for up to a year regardless of the weather.”

Court case decided

        The Public Utilities Commission of Ohio can’t order FirstEnergy power companies to refund $43 million to customers for the “imprudent” purchase of renewable energy credits made in 2010, the Ohio Supreme Court ruled Wednesday.

        A court majority determined the order violated the rule against “retroactive ratemaking” because the power companies sought and received PUCO approval each quarter to add the charges to customer bills.

        Justice William O’Neill said the state’s “no-refund rule” may be perceived as unfair or sometimes results in a windfall for the utility company, but “it is the statutory scheme that requires this result,” and only the state legislature, not the court, can change it.

        During the selecting and awarding of bids to provide renewable energy, FirstEnergy requested the information about the participants and the amounts paid to be sealed. The PUCO granted the request, which was opposed by consumer and environmental organizations.

         The court ruled that the commission did not provide adequate justification for granting trade secret status to the information, and remanded the matter to the commission to provide more detailed reasoning for sealing the information or to make it public.

        Chief Justice Maureen O’Connor and Justice Patrick F. Fischer joined Justice O’Neill’s opinion.

        Justice Sharon Kennedy agreed with the portion of the lead opinion that remanded the trade secret issue to the PUCO but wrote that Ohio law does not allow the PUCO to order a refund.

        However, had the PUCO added language to FirstEnergy power companies’ rate plan, it could have sought refunds, she wrote. Her opinion was joined by Justices Terrence O’Donnell and R. Patrick DeWine.

        Justice Judith L. French dissented, stating that FirstEnergy agreed to allow the PUCO to reduce charges to customers for energy credits that were not prudently purchased as part of an overall three-year rate plan. She wrote that the PUCO was entitled to audit the purchases at a later date to determine if refunds were justified.

 

 

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