UPDATE: Since the March 2016 publication of this original blog post, the Indiana Utility Regulatory Commission (IURC) last week issued an order officially approving a settlement agreement Environmental Defense Fund, along with several other stakeholders, helped negotiate for Duke Energy’s grid modernization plan. The IURC’s order approved the settlement (details of which are outlined in the post below) without change. Now Duke Energy can proceed with the $1.4 billion plan, which will bring many clean energy benefits to Duke’s 800,000 customers.
Help is on the way to reduce harmful pollution in Indiana, which has the seventh highest level of greenhouse gas emissions in the country.
Environmental Defense Fund (EDF) joined a settlement filed this week for Duke Energy’s grid modernization plan. The settlement calls for Duke – the largest utility in the country, which serves over 800,000 Indiana households – to invest $1.4 billion over the next seven years to improve its electric grid. Doing so will deliver major benefits for Duke’s customers. Read More
The Federal Energy Regulatory Commission (FERC) recently rejected Ohio-based utilities FirstEnergy and AEP’s bailout deals, which the Public Utilities Commission of Ohio (PUCO) recently approved. FERC, which is responsible for ensuring fair wholesale electricity prices, recognized that these backroom bailouts were “abusive,” taking advantage of “captive” customers and harming the competitive market. Fortunately, FERC’s rulings protect customers and markets – which the PUCO utterly failed to do in approving these deals.
FirstEnergy and AEP wanted these bailouts to protect their old coal and nuclear plants, which are losing money because they cost more to operate than the money received from power sales. The companies considered shutting down the plants, but they concocted the backroom bailout deals in a last-ditch attempt to keep them open and money rolling in. Read More
In extremely disappointing news, the Public Utilities Commission of Ohio (PUCO) recently approved the AEP and FirstEnergy bailout cases. By keeping old, uneconomic coal and nuclear plants running for the next eight years, the bailouts are bad for customers, bad for the environment, and bad for the competitive electric market. Even worse, customers are forced to subsidize these plants, even if they buy their power from a different supplier.
A broad coalition of consumer, industrial, commercial, and environmental advocates opposed the bailouts, but the PUCO disregarded this strong public opposition. However, the battle over the bailouts is far from over. Read More
AEP Ohio has been busy. On the one hand, it has been trying to keep its outdated, uneconomic coal plants afloat at a hefty cost to Ohioans. And as of last week, the Public Utilities Commission of Ohio (PUCO) approved AEP’s requested subsidies to continue spewing pollution from dirty generators. This bailout is bad news for business, customers, and the environment – and the PUCO should have rejected it. Environmental Defense Fund (EDF) will continue to object to the income-guarantees at the state and federal level.
On the other hand, and in a separate regulatory case, AEP has been working with multiple parties – including EDF – to build a cleaner, smarter grid. Its recent grid modernization agreement is a step toward more efficient, reliable electricity that will help people reduce their energy usage, lower their electric bills, and breathe cleaner air.
These two concurrent cases show AEP needs to decide whether it will change for the future, or stay stuck in the past. And while EDF has been clear in our opposition to the subsidies, today we want to acknowledge AEP’s innovative, forward-looking grid modernization efforts. Read More
Ford launched the Edsel in the late 1950’s as a new, top-of-the-line luxury car. But the project was doomed from the start because the car’s design was outdated and shunned by customers. Ford closed production after only three years, losing nearly $3 billion as measured in today’s dollars. Today “Edsel” is synonymous for a project that is a total failure.
Fast forward to modern day Ohio, where utility giants FirstEnergy and AEP are trying to bail out several old, uneconomic power plants, some of which also were built in the late 1950s. They are asking the Public Utilities Commission of Ohio (PUCO) to guarantee the purchase of power from these outdated plants. The FirstEnergy and AEP bailouts are a bad idea, like the Edsel, yet if the PUCO approves the bailouts, why not subsidize and bring back the Edsel too?
The main rationale for keeping the power plants open is to have a diverse supply of energy resources in Ohio – regardless of whether they are cost-effective or profitable. The utilities’ definition of diversity seems to be having a mix of both modern and ancient generators. So why not bring back the Edsel in order to improve diversity? It would give car buyers more choices, even if it’s a slow, unattractive choice. Read More
Across the country, signs of a cleaner, more efficient, and more affordable U.S. energy system are emerging. But we can’t reach the clean energy future without updating the way utilities make money. Today, utilities earn revenue based on how much electricity they deliver. Companies earn less when they sell less electricity, so they have little incentive to provide energy efficiency programs for their customers.
To address this issue, the Pennsylvania Public Utilities Commission is considering changing how utilities are paid for the electricity they sell. The goal – determining whether new rate plans could eliminate the barriers to energy efficiency programs – is an admirable step toward the clean energy future. Environmental Defense Fund (EDF) has a number of ideas on how to design a more efficient grid, which we filed in comments today:
- Performance-based regulation – Utilities have few incentives to help people adopt solar panels or energy efficiency, so the Commission should implement performance-based regulation plans. Rather than encouraging the sale of more electricity, a performance-based framework would reward utilities for meeting goals that benefit customers and the environment, like encouraging the use of rooftop solar or increasing the use of energy efficiency programs.