{"id":13080,"date":"2016-05-02T09:32:22","date_gmt":"2016-05-02T14:32:22","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=13080"},"modified":"2016-07-11T09:39:19","modified_gmt":"2016-07-11T14:39:19","slug":"ohio-failed-to-protect-customers-and-markets-so-federal-regulators-came-to-the-rescue","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2016\/05\/02\/ohio-failed-to-protect-customers-and-markets-so-federal-regulators-came-to-the-rescue\/","title":{"rendered":"Ohio Failed to Protect Customers and Markets \u2013 So Federal Regulators Came to the Rescue"},"content":{"rendered":"

\"columbus-898928_1280\"The Federal Energy Regulatory Commission (FERC) recently rejected Ohio-based utilities FirstEnergy<\/a> and AEP\u2019s<\/a> bailout deals, which the Public Utilities Commission of Ohio (PUCO) recently approved<\/a>. FERC, which is responsible for ensuring fair wholesale electricity prices, recognized that these backroom bailouts were \u201cabusive,\u201d taking advantage of \u201ccaptive\u201d customers and harming the competitive market. Fortunately, FERC\u2019s rulings protect customers and markets \u2013 which the PUCO utterly failed to do in approving these deals.<\/p>\n

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.<\/p>\n

FirstEnergy and AEP entered into the bailout deals with their sister companies that own and operate the plants \u2013 agreements that had no competitive bidding, no negotiation on price, and no protections for customers. Independent experts reported that the bailouts would cost<\/a> customers $6 billion in above-market prices. The bailouts would keep these plants running for the next eight years, exposing the public to hundreds of millions of tons of toxic emissions.<\/p>\n

Clearly, the bailouts were bad for customers, bad for the environment, and bad for the public. Yet, the PUCO approved the subsidy deals in March.<\/p>\n

[Tweet “Ohio Failed to Protect Customers and Markets \u2013 So Federal Regulators Came to the Rescue”]<\/p>\n

Ohio regulators failed to fulfill their duties<\/strong><\/p>\n

The PUCO\u2019s website explains<\/a> its mission statement as follows:<\/p>\n

Our mission is to assure all residential and business customers have access to adequate, safe and reliable utility services at fair prices, while facilitating an environment that provides competitive choices.<\/p><\/blockquote>\n

The PUCO, by approving the bailouts, abjectly failed to uphold its mission. By stating the subsidies would stabilize prices and protect jobs at these plants, the PUCO tried to justify its decision. Although true, this does not justify saddling customers with $6 billion in above-market costs. Moreover, it stifles innovation and job creation in newer, cleaner energy technology.<\/p>\n

In reality, the PUCO caved to political pressure from two large utilities that happen to be headquartered in Ohio. It\u2019s a sad day in Ohio when regulators place utility interests above customer interests and abandon their mission as regulators, but that\u2019s exactly what happened here.<\/p>\n

The customer-funded subsidy deals were abusive because they would result in a \u201ctransfer [of] benefits to the affiliates and [their] stockholders to the detriment of the captive customers.\u201d<\/p>\n<\/div>\n

Thankfully, FERC came to the rescue and acted to protect customers and competition. The federal agency acknowledged how bad these backroom bailouts were, describing them as \u201cprecisely the type of affiliate abuse\u201d that the agency guards against. The customer-funded subsidy deals were abusive because they would result in a \u201ctransfer [of] benefits to the affiliates and [their] stockholders to the detriment of the captive customers.\u201d FERC readily saw how bad these bailouts were for customers, and the PUCO knew this too, but still went ahead and approved them.<\/p>\n

Going forward, we hope the PUCO commissioners will change their ways and begin protecting customers from these types of abusive deals, as they promised to do when they took office. The FERC commissioners provide a good example. Let\u2019s have less of \u201cpolitics as usual\u201d and more of doing the right thing.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Federal Energy Regulatory Commission (FERC) recently rejected Ohio-based utilities FirstEnergy and AEP\u2019s 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 \u201cabusive,\u201d taking advantage of \u201ccaptive\u201d customers and harming the competitive market. Fortunately, FERC\u2019s rulings …<\/p>\n","protected":false},"author":12461,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46898,28800,27600],"tags":[],"coauthors":[],"class_list":["post-13080","post","type-post","status-publish","format-standard","hentry","category-firstenergy","category-ohio","category-utilities"],"acf":[],"yoast_head":"\nOhio Failed to Protect Customers and Markets \u2013 So Federal Regulators Came to the Rescue - Energy Exchange<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.edf.org\/energyexchange\/2016\/05\/02\/ohio-failed-to-protect-customers-and-markets-so-federal-regulators-came-to-the-rescue\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ohio Failed to Protect Customers and Markets \u2013 So Federal Regulators Came to the Rescue - Energy Exchange\" \/>\n<meta property=\"og:description\" content=\"The Federal Energy Regulatory Commission (FERC) recently rejected Ohio-based utilities FirstEnergy and AEP\u2019s bailout deals, which the Public Utilities Commission of Ohio (PUCO) recently approved. 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