Ohio AEP is thinking about BigWind causing ‘reliability concerns’

The ‘green machine’ is moving throughout Ohio, encouraging support for renewable energy within our state. Despite a recent PUCO decision against AEP, note what the Commission will consider in the future: necessity of the generating facility in light of future reliability concerns and impact that closures would have on prices and resulting effec on economic development in our state.  Those are encouraging signs that at least someone is awake at PUCO.  Renewables, like BigWind will significantly impact our electricity reliability, because it is not dispatch able, and it cannot be turned on when needed.  And, BigWind, will definitely effect our economic viability if it is allowed to continually spread.  Our ratepayers and industry cannot survive the higher electricity rates that will come with it.  Please remember that the Energy Mandates Committee has begun meeting regularly and it is important to communicate your concerns to legislators!  This committee will determine the future for BigWind in our state, as a result of Senate Bill 310, that passed last year.  It is important that legislators know how you feel!…..

…the Public Utilities Commission of Ohio declined to approve AEP Ohio’s proposed power purchase agreement pertaining to its share of two power plants operated by the Ohio Valley Electric Corporation (OVEC).  In turning down the request, the Commission cited the lack of clear evidence that the proposal would benefit ratepayers.

However, the Commission concluded that it has the legal authority to approve such agreements if needed to ensure reliability and rate stability, and it authorized AEP Ohio to establish “a placeholder PPA rider, at an initial rate of zero, for the term of the ESP.”  The Commission noted that the decision in this case “does not preclude [AEP Ohio] from seeking recovery of its OVEC costs in a future filing.”

In its Opinion, the Commission laid out a standard for how it would evaluate any such future PPA requests, including the following:

  • Financial need of the generating plant
  • Necessity of the generating facility, in light of future reliability concerns, including supply diversity
  • Description of how plant is compliant with all pertinent environmental regulations and plan for compliance with pending environmental regulations
  • Impact closure would have on prices and resulting effect on economic development in state…

This decision is a mixed bag for both the utilities and Ohio’s advanced energy industry.  On the one hand, it opens the door for continued operation of uneconomic electricity generation in Ohio which could make it more challenging to implement competitive energy projects.  On the other hand, the Commission’s guidance on factors to be considered in future PPA requests makes it clear that supply diversity must be addressed, as well as compliance with current and potential environmental regulations.  And the Commission made it clear that it reserves the right to retain its own consultants in future cases to evaluate the true costs and benefits to consumers.  What is certain is that this is new territory for all concerned, and it will take time to resolve the issues raised in this case….

via: Ohio Advanced Energy Economy newsletter 2/26/15: http://ohioadvancedenergy.org/news/e-newsletter-archive/PUCO opinion: http://dis.puc.state.oh.us/TiffToPDf/A1001001A15B25B40110J73365.pdf