Energy Exchange

Creative Utility Accounting: Estimating the True Cost of a Subsidy

By Dick Munson / Published: May 7, 2015

$5 billion is a lot of money, yet that’s the difference in cost estimates between an Ohio-based, consumer advocacy group and FirstEnergy for the utility’s proposed bailout plan.

FirstEnergy, the giant Akron-based company that owns power plants and transmission lines in several midwestern and northeastern states, calculates its proposed plan to raise electricity rates will eventually save Ohio customers $2 billion. The Ohio Consumers’ Counsel, in contrast, estimates the subsidies will cost Ohioans $3 billion.

To appreciate the differences, consider a little history.

Several years ago, FirstEnergy thought it could profit in emerging regional electricity markets, so it convinced regulators to allow it to set up a separate subsidiary that would generate and sell electricity. That unit was to be independent from another subsidiary company, which managed the power wires and delivered power to customers. This partial step toward free markets, however, didn’t work out too well for FirstEnergy. Now, it’s asking regulators to abandon competition. Read More »

Also posted in Clean Energy, FirstEnergy / Read 3 Responses

FirstEnergy Wages All-Out War on Clean Energy

By Dick Munson / Published: April 30, 2015

America’s electricity landscape is changing dramatically. Clean energy resources like solar and wind are becoming cost competitive with conventional coal, global corporations like Walmart, Google, and Facebook are pressuring utilities to increase their share of renewables, and the cost of investing in energy efficiency measures is now under half the cost of building dirty, coal-fired power plants.

While some in the utility industry are adapting their business models to accommodate these changes, others are fighting it. Nowhere is this more apparent than in Ohio, where Akron-based power company, FirstEnergy, recently gained regulatory approval to abandon its energy efficiency programs. While this move is expected to raise electricity rates for FirstEnergy customers and increase harmful emissions from the coal-fired power plants that will be needed to “fill the gap” of previously offset energy demand, FirstEnergy has much more in store for the Buckeye State. In fact, they are waging an all-out war on clean energy in a last-ditch effort to protect their inefficient, polluting, and unprofitable fleet of coal-fired power plants. Read More »

Also posted in FirstEnergy / Read 2 Responses

A Two-in-One Energy Solution: Capturing Waste Heat for Electricity

By Dick Munson / Published: April 27, 2015

Source: flickr/Vattenfall In Dublin, Ohio, the Community Recreation Center decided to reduce its energy waste. Rather than rely on an electric utility to burn more coal or natural gas to provide electricity, as well as its own boilers to burn more fuel to provide heat, the facility decided to install a combined heat and power (CHP) unit.

The CHP or “cogeneration” project produces both electricity – allowing the Center to keep its lights on during power outages – and heat – keeping offices and swimming pools warm. The CHP unit is financed with private capital and will allow the Center to save roughly 10 percent on its energy bills.

“It’s pretty simple,” said Patrick Smith, a co-developer of the Dublin project. “It’s a generator, and we happen to capture the heat.”

Technology of the past…

Cogeneration is not a new concept or technology. In fact, Thomas Edison’s first power plants sold both heat and electricity to nearby buildings and factories. Yet to electrify America quickly in the early 20^th century, policymakers and power companies created monopoly electric utilities that were protected from competition and guaranteed profits based on how much money they spent. As a result, for many decades, utilities favored larger and larger power plants that were placed far away from the buildings and factories that could have used their wasted heat. Read More »

Also posted in Energy Efficiency / Comments are closed

Ohio Pressed Pause on Economic Growth When It Froze Its Clean Energy Standards

By Dick Munson / Published: March 18, 2015

Ohio shot itself in the foot last year and we’re only now learning just how bad the damage is.

In May of 2014, the Ohio Legislature froze the state’s energy efficiency and renewable energy standards as a result of political pressure from Ohio’s largest power company, FirstEnergy, and other groups. This freeze came after efficiency measures led to more than $1 billion in savings for Ohioans, clean energy companies invested more than $660 million in 2012 alone, Ohio boasted the nation’s largest number of wind-component manufacturing facilities, and the state created 43,000 in-state jobs within the clean energy sector.

Needless to say, from 2008, when Ohio enacted its clean energy standards, to 2014, when it froze them, the Buckeye State was a clean energy powerhouse. But, as the Center for American Progress reports, when Ohio put a freeze on its clean energy economy, it hit the pause button on its entire economy.

According to the report, the freeze cost Ohio millions of dollars in energy investment. That equates to job losses, cancelled projects that would have brought sustained tax revenue to Ohio, and shifting operations to other, business-friendly states. Read More »

Also posted in Clean Energy, Energy Efficiency, Renewable Energy / Read 2 Responses

Ohio Electricity Regulators Reject Bailout for Uneconomic Power Plants

By John Finnigan / Published: February 27, 2015

Ohio’s clean energy economy celebrated a big win this week. The Public Utilities Commission of Ohio (PUCO) denied American Electric Power Company’s (AEP) request for guaranteed profits to operate its aging, uneconomic coal power plants. EDF, along with many other parties, opposed AEP’s proposal.

EDF applauds the Commission for recognizing AEP’s proposal would not benefit Ohio residents and businesses. These old coal plants cost more to operate than the value of power they generate. Plus, they produce harmful greenhouse gas emissions which, if the plants continue to operate, would make it more difficult for Ohio to comply with the Environmental Protection Agency’s (EPA) proposed Clean Power Plan, which would set the first-ever limits on carbon emissions from existing power plants.

The Public Utilities Commission’s decision sends a clear message: power companies can no longer rest on their laurels. Clean energy businesses, entrepreneurs, investors, and Ohioans are ready for a new era – one in which utility profits are not placed ahead of Ohio’s best interests.

With gas prices low, an increased use of renewable energy, and weak demand resulting from customer energy efficiency improvements, some utilities like AEP are now burdened by their heavy reliance on coal – and looking to their customers to bail out their uneconomic power plants. Thankfully, yesterday’s decision assures that the market will remain competitive, giving clean energy resources an equal opportunity to compete with legacy fossil fuel plants. Read More »

Also posted in Clean Energy, Climate / Read 1 Response

Fact: Clean Energy is Working in Ohio

By Dick Munson / Published: May 19, 2014

Chris Prandoni certainly is welcome to his own opinions, but not his own facts. As the Director of Energy and Environmental Policy at Americans for Tax Reform, Prandoni may favor coal-fired power plants and dislike energy efficiency and renewables, but there’s no doubt Ohio’s clean energy standards are saving consumers money and bringing huge investments into the state.

Prandoni supports S.B. 310, which has already passed the Ohio Senate and is expected to enter the House within the next week, and promises to kill the state’s renewable portfolio standards (RPS) and energy efficiency directives. If Prandoni has his way, and as he points out in his misinformed Forbes op-ed, Ohio would be the first state in the nation to “pare back” its clean energy mandates, but this is not something Ohioans should be proud of. Read More »

Also posted in Clean Energy, Energy Efficiency, Renewable Energy, Utility Business Models / Tagged SB310 | Read 1 Response