- FirstEnergy's proposal to guarantee income for two struggling power plants in Ohio continues to face questions, and now the nation's largest nuclear generator says it believes the deal is unfair to the state's ratepayers and that it can offer a better deal, EnergyWire reports.
- A new round of hearings this month will consider fresh questions behind FirstEnergy's plan to guarantee income at its Davis-Besse Nuclear Power Station in Oak Harbor and the W.H. Sammis coal-fired plant in Stratton. The utility's proposal also includes a portion of the output of Ohio Valley Electric Corporation units in Gallipolis, Ohio, and Madison, Indiana.
- Exelon believes the deal is a bad one for Ohio consumers, and told state regulators in a filing just before the end of the year that it can provide 3,000 MW of carbon-free generation $2 billion cheaper than the eight-year settlement deal FirstEnergy brokered with stakeholders in December.
There was a point last year when FirstEnergy's plan to guarantee income to its struggling baseload generation in Ohio seemed close to approval. The company struck a settlement with 15 other parties in the regulatory proceeding, agreed to slash the length of power purchase agreements from 15 to eight years, and included consumer bill credits to lessen the early impacts.
Under the plan, customers would pay about $3.25 more per month in the first year of the power purchase agreements, but the company says they will save more than $560 million over the life of the arrangement, due mostly to expected increases in natural gas prices.
But then regulators called a second round of hearings for later this month after opponents argued the settlement raised new issues. And now the nation's largest nuclear generator – Exelon, which doesn't have any facilities in Ohio – is seeking to move in on the deal as well.
The company filed testimony with the Public Utilities Commission of Ohio (PUCO) on Dec. 30, urging regulators to consider a competitive bidding process for its power needs, arguing that it would result in lower prices and greater choice for Ohio customers.
Such a process would also "wash away the stain of this affiliate backroom deal where FirstEnergy has positioned its regulated utility to benefit its affiliate First Energy Solutions exclusively by coupling the proposed power purchase agreement with settlement 'goodies' provided by the regulated utility," Exelon Director of Regulatory and Government Affairs Lael Campbell said, according to the filing.
According to the Exelon director, the company is intervening so "no one can misunderstand the gravity of the harm that would occur to Ohio customers" under the FirstEnergy settlement. The Illinois-based nuclear generator, he said, could offer a better deal.
"A guaranteed eight year offer from Exelon Generation ... for 100% emissions-free power that we make today will provide well over $2 billion in savings to Ohio families and businesses as compared to the grossly lopsided deal offered by FirstEnergy Ohio," Campbell wrote.
Campbell said the company's concessions, including a commitment to more renewables and grid modernization work, are "nothing more than window dressing designed to hide from the public an
Exelon did not specify where the generation to serve Ohio customers would come from, but said that it would deliver energy from renewable sources and nuclear plants in the PJM region. Like FirstEnergy, a number of Exelon's nuclear plants in PJM are losing money or running on the verge of unprofitability due to the historically low price of natural gas and cheap wind generation. Winning the ability to supply Ohio customers instead of FirstEnergy could be a boon for facilities like the Quad Cities nuclear plant, which the company said it could decide to shut down this year, despite changes to capacity market rules that would deliver enhanced reliability payments to the plant.
The new round of hearings will kick off in a couple of weeks, and Exelon isn't the only company stepping into the fray. Rival Ohio generator Dynegy has indicated it could file a lawsuit challenging the power purchase agreements if regulators approve them.
The case is also being closely watched by American Electric Power, which proposed a similar arrangement for four of its coal-generating facilities. Hearings began this week into that proposal after a settlement was struck with the Sierra Club and other intervenors to increase renewable generation and shut down other coal units in exchange for income guarantees for the plants.
Exelon's offer to supply the 3,000 MW of generation is good for six months, according to EnergyWire.