COLUMBUS, Ohio -- State regulators have approved what they describe as a modified version of the FirstEnergy request to have customers subsidize the continued operations of Davis-Besse nuclear power plant and the coal-fired W.H. Sammis power plant.
Customers will be forced to buy power from the old plants even when cheaper power is available.
The PUCO has approved an arrangement in which FirstEnergy's local distribution companies such as Ohio Edison and the Illuminating Co., will buy electricity directly from Sammis and Davis-Besse at whatever the cost and then bid that power into competitive wholesale markets, where it would sell for less, at least in today's markets which are dominated by gas-fired competitors. Customers would make up the difference with an extra monthly charge.
To read a copy of the 137-page order, click here.
The commission also Thursday approved a similar request from Ohio Power, a subsidiary of American Electric Power.
Filed in October 2014, a couple of months after FirstEnergy, AEP Ohio also asked for an arrangement to have customers subsidize a number of its oldest coal-fired plants; but unlike FirstEnergy, the company has agreed to shut down coal plants at future dates and to build wind and solar farms -- if the PUCO has customers pay for the projects, just as customers once did before deregulation. Those wind and solar projects will be debated in future cases.
"Although the Public Utilities Commission of Ohio modified the settlement agreement, they did recognize the significant benefits of this plan for Ohio consumers. This plan will ensure more stable electricity prices in Ohio and promote the development of new, renewable generation to support the state's economy," said Nicholas K. Akins, AEP chairman, president and chief executive office, in a prepared statement. The company must also in the future modify its current rate plan to extend it to eight years, an unprecedented length.
Here are summaries of the two FERC cases:
The first case, filed by competitors of FirstEnergy and AEP's Ohio Power, asks the FERC to revoke a prior order allowing the Ohio companies to buy electricity from their affiliates because these sweetheart deals don't allow other companies to compete for that business. In other words, the deals are anti-competitive, they argue.
A second case before the FERC asks federal regulators to set minimum pricing rules for the hourly and daily competition overseen by the non-profit PJM Interconnection that supplies power to the high-voltage grid from Ohio to New Jersey.