Coal / Duke Energy / Energy

Duke decision on Ohio ‘bailout’ proposal mirrors AEP ruling

COLUMBUS — “Ohio regulators have rejected the second of three utilities’ “bailout” proposals, presenting further hurdles for FirstEnergy in an upcoming hearing for its case….

‘Price stabilization’ vs. ‘bailouts’

In general, Ohio law grants a monopoly to electric distribution utilities, but lets customers choose their electric generation suppliers. If approved, the Duke and AEP plans would have let the utilities buy electricity from their OVEC affiliate at a long-term contract price and pass the costs on to all distribution customers, regardless of whom they chose as their electricity provider.

Utilities have said the plans would provide long-term price stability for customers.

Consumer and environmental groups have opposed the plans as “bailouts” designed to let inefficient plants avoid competition at the expense of ratepayers. Competitors have objected to the plans as well.

In late February the PUCO ruled that it had authority to order such a plan, but that AEP did not prove its proposal would give consumers a net benefit.

Last week’s decision in Duke’s case reached a similar conclusion. The PUCO ruled that the evidence “reflects that the rider may result in a net cost to customers, with little offsetting benefit.”

The PUCO noted that there would be a net loss for the three years of the immediate plan. Looking beyond that, a Sierra Club analysis of the utility’s own data showed that consumers would still sustain a net loss for ten years.”

— Kathiann Kowalski, Midwest Energy News

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