Ohio regulators OK $100 million in subsidies for 2 aging coal-fired power plants - The Columbus Dispatch
House Bill 6 subsidies approved for Ohio Valley Electric coal plants
Ohio regulators OK $100 million in subsidies for 2 aging coal-fired power plants
Mark Williams
State regulators have signed off on more than $100 million in subsidies from 2020 by Ohio electricity customers to pay for the operation of two old coal-fired power plants that were part of one of the state's biggest scandals.
The Public Utilities Commission of Ohio on Wednesday voted to allow AEP Ohio, Duke Energy Ohio and AES Ohio to collect the costs they incurred to operate the plants that year.
The commissioners, in a report, found the costs were "prudent and reasonable," overruling consumer groups and others that have long objected to the subsidies for the Kyger Creek plant in Cheshire in southern Ohio and Clifty Creek in Madison, Indiana. The three companies are part owners of Ohio Valley Electricity that operate the plants.
"House Bill 6 continues to plague Ohioans, costing them nearly $600 million in subsidies since 2017 and is expected to exceed $1 billion by 2030," the Ohio Manufacturers Association said in a statement.
"Consumers once again got stuck with the bill," Ohio Consumers Counsel Maureen Willis said in a statement.
House Bill 6 subsidies for coal
House Bill 6 is best known for the $60 million scandal that led to indictments of former FirstEnergy executives, former Ohio House speaker Larry Householder, former PUCO chairman Sam Randazzo and others.
Initially, the purpose of the bill was to provide a bailout for the state's two nuclear power plants that were owned by Akron-based FirstEnergy at the time. That bailout was subsequently repealed.
Later, legislators added the subsidies for the Ohio Valley Electric plants if they sell electricity at a cost below what it takes to produce.
What exactly did the commission do?
The commission's ruling upheld subsidies totaling $105 million from 2020 for AEP Ohio, DP&L and Duke, according to the Consumers' Counsel.
Commissioners also found in four other cases that subsidies that date back to 2016, before HB6 became law, were proper.
The Consumers' Counsel had challenged the subsidies on the basis that the utilities failed to show that the plants were operated prudently, in the best interest of consumers and consistent with how a reasonable merchant coal plant operator would have bid the plants into the electricity market.
The legislation allows for additional multiyear reviews of the costs to operate the plants in 2024, '27 and '30.
The Union of Concerned Scientists testified that Ohio Valley incurred $117.9 million in costs above what the cost of electricity could have purchased for in the open market in 2020.
“Coal-fired electricity is not only terribly destructive to our climate and public health, but it’s also completely uneconomical and has been for a long time," Paul Arbaje, an energy analyst with the group, said in a statement. "There are few better examples of these poor economics than the OVEC coal plants. Ohio ratepayers deserve better than to be forced to cover more than $100 million in unnecessary costs to operate these antiquated power plants when more affordable energy sources are available."
@BizMarkWilliams