Federal challenges could sink Ohio utilities’ income guarantee plans
New court cases and filings with the Federal Energy Regulatory Commission could derail FirstEnergy and American Electric Power’s plans to guarantee sales to affiliated power plants, even if Ohio regulators approve the deals.
On January 27, the Office of the Ohio Consumers’ Counsel joined with competing electric generation companies and industry groups in asking FERC to review those plans, which environmental groups, consumer advocates and business challengers see as noncompetitive “bailouts.”
The plans “would saddle captive Ohio consumers with hundreds of millions or even billions of dollars in above-market costs and would artificially distort prices in the PJM Interconnection, L.L.C. (‘PJM’) markets,” claimed the complaints by Electric Power Supply Association, Retail Electric Supply Association and several companies, including Dynegy.
“We ask federal regulators who oversee the nation’s electric markets to protect several million Ohio consumers from paying higher electric bills to bail out deregulated power plants,” said Ohio Consumers’ Counsel Bruce Weston in the announcement.
‘What is best for the customers’
The FERC filings come at the conclusion of additional hearings held before the Public Utilities Commission of Ohio earlier this month to review settlements that trimmed both companies’ plan terms to eight years and added other provisions.
At the heart of the cases before both venues is whether FirstEnergy and AEP should get an exception from state and federal law calling for competition in the sale of electricity generation.
Challengers argue that the proposed power purchase agreements would cost Ohio consumers billions of dollars and violate laws calling for fair competition among unregulated electric generation companies.
“The PUCO has conducted an extensive review process over the last two years to ensure that AEP Ohio customers are treated fairly and benefit” from the plan, said AEP spokesperson Melissa McHenry.
