Energy Exchange

Trump may greenlight an $8 billion attack on competitive energy markets

President Trump may soon grossly distort competitive markets for electricity. Last week, he announced his consideration of a request for “202(c),” by which he means an $8 billion proposal to bail out all merchant coal and nuclear plants in a region that spans across 13 Midwestern and Mid-Atlantic states.

The request comes from FirstEnergy, the Ohio-based utility giant that has sought billions of bailout dollars over the last decade to cover its bad business decisions. Although repeatedly rebuked by federal and state regulators, the company recently asked the U.S. Department of Energy (DOE) to bail out coal and nuclear units in the PJM-grid operator region by invoking section 202(c) of the Federal Power Act. Using this power would require the Department to find that additional compensation to these plants is necessary due to an “emergency” on the grid. The audacious proposal would bail out not only FirstEnergy’s facilities, but more than 80 coal and nuclear units throughout PJM, the largest grid-operator region in the U.S.

The plea aims to increase electricity bills by a staggering $8 billion annually. It also would insulate old, dirty power plants from competition – protecting them from markets where more affordable resources like solar, wind and natural gas are helping to drive down electricity bills for Americans. Read More »

Also posted in Clean Energy / Language: / Comments are closed

FirstEnergy shamelessly begs DOE to prop up uneconomic coal and nukes

By Michael Panfil, Dick Munson

Yesterday, FirstEnergy submitted an outrageous request to the U.S. Department of Energy (DOE).

The Ohio-based utility giant wants DOE to bail out not only its uneconomic coal and nuclear plants, but all ailing plants across the PJM Interconnection region – which includes 13 states and Washington D.C. FirstEnergy’s request, if granted, would fundamentally undermine important energy policy and represent a major step backwards for the American electric grid.

Federal regulators and many, many experts agree there is no imminent threat to the electric grid’s resilience. Yet FirstEnergy is attempting to mislead the government and American public by arguing its outdated plants are needed to keep the lights on.

This is far from the first time the company has requested a bailout, but this latest effort is its most shameless yet. By arguing that the federal government got it wrong earlier this year – when it declined to provide profit guarantees for the company’s expensive coal and nuclear plants – FirstEnergy is attacking the agency that oversees the interstate electric grid, ignoring evidence, making an illegal recommendation, and asking the American public to foot the bill for a multibillion-dollar-a-year bailout. Read More »

Also posted in Washington, DC / Language: / Comments are closed

New federal tax law is a boon for electric utilities – another reason not to bail out Ohio’s coal and nuclear plants

BLOG UPDATE – FEBRUARY 16, 2018

Environmental Defense Fund and other environmental groups submitted comments [PDF] to the Public Utilities Commission of Ohio on the federal tax reform, and why the Commission should reconsider utilities’ requests to increase rates to help prop up their old coal and nuclear plants. The groups suggest the utilities should pass the savings back to customers and, in addition, consider using some of the funds to modernize the electric grid and benefit customers.

For the past few years, Ohio’s electric utilities have asked state lawmakers and the Public Utilities Commission of Ohio (PUCO) to bail out their old coal and nuclear plants. The storyline is, the power plants are losing money in the competitive wholesale market, so the utilities want customers to subsidize the losses and allow the plants to stay open.

To keep old plants running is throwing good money after bad. And the new federal tax law will give utilities a huge bonanza anyway, so the requested subsidies are even more unnecessary.

Tax breaks and bailouts

The new federal tax law is a jackpot for electric utilities. Congress passed the Tax Cuts and Jobs Act in late December, reducing the corporate income tax rate from 35 percent to 21 percent. For the regulated businesses, the tax cut should benefit customers via lower electricity bills. But for the utilities’ unregulated businesses, the tax cut will benefit the utilities’ shareholders. Read More »

Also posted in Ohio / Language: / Read 3 Responses

This Midwestern state is the surprising standout on cutting carbon pollution.

One state surprisingly stands out for reducing carbon emissions from electricity.

Ohio saw an impressive 37.7 percent drop in its power sector’s carbon emissions from 2005 to 2015. Despite not having a stellar track record on clean energy, the Buckeye State, in fact, has become the nation’s carbon-reducing powerhouse: In absolute terms, Ohio slashed its carbon pollution by 50 million metric tons (MMT) during that decade – far more than any other state.

No doubt the steep drop in natural gas prices during this time period played a starring role in this change, forcing numerous dirty Ohio coal plants to close. Yet, despite recurrent challenges from subsidy-seeking utilities, Ohio’s deregulated electricity market and clean energy standards are also to thank. Imagine the carbon reductions that could be achieved if Ohio fully embraced clean energy technologies, and stopped trying to gut the state’s clean energy standards and bail out aging coal plants. Read More »

Also posted in Clean Energy, Ohio / Language: / Read 1 Response

Ohio needs a clean energy future, not a no-strings-attached bailout

It’s understandable that FirstEnergy’s hometown newspaper, the Akron Beacon Journal, supports its own utility monopoly. Yet justifying that support and advocating for FirstEnergy’s proposed nuclear bailout on environmental grounds is a surprise…and misdirected.

FirstEnergy’s proposal merely is yet another attempt to force customers to prop up its uneconomic power plants. Blanket subsidies for nuclear without any additional considerations will only delay the transition to a cleaner energy future, and we can’t afford to delay. Read More »

Also posted in Ohio / Language: / Comments are closed

Ohio electricity battles abound

Crain’s Cleveland Business first published this op-ed on July 16, 2017. 

Ohio long has been a bellwether state. Politically, no state during the past 120 years has picked more winners of presidential elections. Ohio also reflects the nation’s diverse and evolving set of energy resources. In particular, this past year Ohio became ground zero in the electricity wars. Its utilities are seeking subsidies for uneconomic power plants, setting up a lively federalism debate about when states can encourage specific energy technologies. Meanwhile, Ohio manufacturers and customers are seeking to break up utility monopolies, provoking discussions about the role of competition in electricity markets.
Read More »

Also posted in Ohio, Utility Business Models / Language: / Comments are closed