AEP says it needs to raise the charge paid by competitors for its electricity to help stabilize its finances during a multiyear transition to a new pricing system.
COLUMBUS — “Evidence is starting to emerge about how electricity suppliers will react if state regulators grant American Electric Power’s request to modify a fee paid by competitors.
DPL Energy already is passing the costs on to customers, according to a filing by grocery chain Aldi Inc. with the Public Utilities Commission of Ohio.
Border Energy executives have decided that half of the cost will be passed on to customers.The PUCO last month approved temporary changes in the ‘capacity charge’ that electricity suppliers must pay each month.”
The American Electric Power Co. coal burning plant in Conesville, Ohio.
CHICAGO, IL — “The coal-fired power industry in the U.S. is facing the biggest plunge in asset values in a decade, risking billions of dollars in pollution-control spending by utilities such as Exelon Corp. (EXC) and American Electric Power Co. (AEP)
An indication of how much new emissions rules and cheaper natural gas have hammered the value of coal-burning generation will come when Exelon announces the results of the first big sale of U.S. coal-fired power plants in four years.
Exelon, the largest U.S. power company, may have to take a 40 percent discount for three Maryland plants it’s seeking to sell by the end of August. Bidders including NRG Energy Inc. (NRG) (NRG) have offered $600 million to $700 million for the units, which have a fair value of $1 billion, said Travis Miller, Chicago- based director of utilities research for Morningstar Inc.”
COLUMBUS — “In a year notable for its barrage of presidential TV ads, a pair of Ohio utilities unaccustomed to high-profile spats is also taking to the airwaves in a dispute over future electric bills.
The rivalry involves Columbus-based American Electric Power’s request to raise rates as it recovers costs associated with switching to a deregulated market.
The utility company says the increases are necessary to cover contract obligations and protect its workforce, but competitors, led by Akron-based FirstEnergy, say the added charges will make it impossible to compete in AEP territory.
The often impermeable world of utility regulation has been translated for the airwaves into an ugly schoolyard squabble.
…Sandy Buchanan, executive director of Ohio Citizen Action, a watchdog group specializing in energy issues, said FirstEnergy did not raise rates — but did tack surcharges to cover its nuclear plants onto electric bills for years.
‘The way I read this is that AEP is saying, ‘Hey, wait a minute. FirstEnergy got this bailout, how come we can’t get a bailout now that we’ve decided to enter this retail market?” Buchanan said. ‘I mean, it wasn’t fair that FirstEnergy got a bailout, so is it now fair for AEP to get one? All of that is bad for consumers.’
In this AEP advertisement, a man in a suit steals lemonade from a child and sets up his own stand. AEP likens that to FirstEnergy's approach.
COLUMBUS — “The companies sell the same product and, for the first time, are competing for the same customers. For all of the humorous commercials, this battle is not child’s play. At the heart of the fight is this question: How much should AEP be able to charge for the power-generating capacity it maintains so that customers in its territory can always keep the lights on, even when use spikes to very high levels?
AEP is looking for an increase in such charges.
Otherwise, the company contends, competitors can buy capacity from AEP at artificially low rates and use it to undercut AEP’s price.FirstEnergy says it is playing by the rules and is forcing AEP to compete, while AEP says the setup has deep flaws that could be catastrophic to its business. The Public Utilities Commission of Ohio is considering AEP’s request to allow a temporary increase in the charges.”
COLUMBUS — “American Electric Power is asking for a rate increase that exceeds the level allowed by state law, according to a testimony released last night by the Public Utilities Commission of Ohio staff.
The staff concludes that the AEP plan would be more expensive in its first year than a rate based on market prices, which would go against a provision in state law.
The PUCO’s five-member board can decide whether to accept or reject the findings of its staff. The staff’s advice is now part of the case’s record and other participants will have chance to respond.”
AKRON — “What fun it must have been to write those television ads airing lately for fairenergyohio.org, the front operation for American Electric Power.
No need to worry about the truth. Be as creative, or outrageous, as necessary. Just include a handful of key words — scheme, bailout, deals, unfair and, oh, yeah, cost or destroy ‘thousands of Ohio jobs.’
One of the darkest arts in political campaigns today is seeking to turn an opponent’s strength into a weakness. John Kerry, decorated war veteran? Unleash the Swift Boaters. AEP has something more galling in mind: morph its glaring weakness into an advantage.”
AEP customers have alternative rate offers, but marketers’ pitches require study
COLUMBUS — “Solicitors want to take customers away from the rate-regulated utility, American Electric Power. They are making pitches in person, on the phone and through the mail.
Each of the offers claims to provide savings, but the reality is sometimes more complicated. More than one in 10 households have switched, and some have complained about deceptive sales tactics.
The smartest thing a customer can do is refuse to make an immediate decision when someone is making a sales pitch, said Greg Slone, senior energy analyst at the Office of the Ohio Consumers’ Counsel, the state’s advocate for utility customers.”
Power plants abandon longtime staple for generating electricity as price of natural gas plummets
Coal consumption fell 9.4% in the fourth quarter from a year earlier as power generators sought cheaper fuel. Above, a Virginia mining operation.
NEW YORK, NY — “U.S. electric utilities are renegotiating coal contracts and finding other ways to reduce coal deliveries as a mild winter and competition from less-expensive natural gas combine to weaken demand for power plants’ longtime staple fuel.
Coal consumption by power generators fell 18.8% in the fourth quarter from the preceding quarter and 9.4% from the fourth quarter of 2010, the Energy Information Administration said last week.
The agency hasn’t calculated first-quarter coal use yet. But utilities have indicated that they are shifting power production to natural gas, the price of which recently dipped below $2 per million British thermal units, roughly half what it was a year ago.”
CHARLESTON, WV — “Perhaps I’m reading too much into it, and perhaps part of it was the way the stories were reported by two different reporters (neither of which was me — and I didn’t attend Akins’ appearance in Charleston or the company’s annual meeting). But it struck me as a bit of playing to your audience. To shareholders worried about their bottom line, the message was that AEP is diversifying and moving away from what is fast becoming a costly and out of favor fuel. To West Virginia business leaders — always a crowd who wants to hear how great a future coal has — the message was to not worry and be happy. Nothing to see there with those projections of huge declines in Central Appalachian coal production. Just move along.”
COLUMBUS — “The study, commissioned by the Natural Resources Defense Council, claims air pollution from AEP’s coal-fired power plants is contributing to thousands of deaths and illnesses in states touched by the company’s emissions. Ohio is near the top of the sick list, trailing only Pennsylvania.
The study said AEP-generated pollution contributed to anywhere from 179 to 457 premature deaths in Ohio last year. It also allegedly was a factor in 2,800 asthma attacks, 315 emergency room and hospital admissions and 144,719 days of lost work or reduced activity by Ohio workers.
The Natural Resources Defense Council is among the many environmental groups pressing AEP and federal policy makers to do something about all the air pollution generated by the company’s coal-burning power plants. The council released the report on eve of AEP’s annual meeting Tuesday – the first at which Akins presided as CEO – and prior to his speech on energy prices and the U.S. economy slated for Thursday at a National Chamber Foundation event.”
For a week, AEP has been running a commercial that depicts FirstEnergy as a man in a suit who is stealing from a girl’s lemonade stand. AEP said it is calling attention to the unfairness of a system that makes it too easy for competitors to take customers from the Columbus-based utility.
FirstEnergy disputes that and says AEP wants to hold its customers hostage to high prices.
The arguments are being made as the Public Utilities Commission of Ohio reviews a case that will set the level of a key fee for alternative electricity suppliers.
‘We felt there was some misinformation’ in the AEP ad, said Doug Colafella, a FirstEnergy spokesman. FirstEnergy has not taken its message to television, but Colafella did not rule it out.”
COLUMBUS — “American Electric Power Ohio has taken the unusual step of airing television ads in its ongoing debate with FirstEnergy Corporation over a pending rate case.
…At issue is a highly technical debate between the two utilities over AEP’s capacity charge, or how much the utility charges competitive suppliers for electricity they sell to customers in their service territory who switch. The Public Utilities Commission of Ohio is expected to make a ruling later this spring.
FirstEnergy Solutions and other competitive suppliers argue that AEP’s plan to charge $145 per megawatt-day for the first 21% of customers who switch, and $255 MW/day thereafter, is much higher than the market price for capacity, which will be $16 per megawatt-day in June.
AEP spokeswoman Terri Flora said with so many residential and small business customers now focused on the utility’s pending rate case, it made sense for the utility to explain their side of the story more publicly.”
CLEVELAND – Gov. John Kasich’s energy plan is mostly a fracking plan, but he has rounded it out with some gifts to Ohio’s coal-fired utilities. The outline of his plan includes the following:
$30 million for coal research projects on carbon capture, sequestration, enhanced oil recovery, and new technologies
Streamlining and simplifying permit process for coal companies
Exempt coal combustion waste from additional fees and encourage solid waste landfill management
Carbon capture and sequestration:At this point, it is hard to see how $30 million is going to do much to advance this speculative technology. Last July, American Electric Power gave up on its carbon capture and sequestration pilot project at its Mountaineer Plant in New Haven, West Virginia, just across the Ohio River from Racine, Ohio, in Meigs County. When AEP walked away from the project, it had already absorbed $334 million from the U.S. Department of Energy. With the state budget as tight as ever, Kasich needs to justify spending $30 million in Ohio taxpayer dollars on a technology that utilities and the federal government are abandoning.
Further, since fracking is his top priority, Gov. Kasich might want to check the March 16 issue of Scientific American for an article called, “Can Fracking and Carbon Sequestration Coexist? Drilling for natural gas and storing CO2 deep underground may be headed for a collision,” by Christa Marshall. The author reports on new research at Princeton University “finding that many of the same shale rock formations where companies want to extract gas also happen to sit above optimal sites envisioned for storing carbon dioxide underground that is captured from power plants and industrial facilities. The problem with this overlap, the researchers found, is that shale-gas extraction involves fracturing rock that could be needed as an impenetrable cover to hold CO2 underground permanently and prevent it from leaking back into the atmosphere.”
Streamlining permitting:Stay tuned. Without details yet from the Kasich Administration, there is no way to know what this means.
Coal ash:Ohio’s coal plants produce 10,429 tons of coal ash a year, ranking third highest in the nation. This waste contains arsenic, lead, hexavalent chromium, cadmium, mercury, and other cancer-causing and neurotoxic chemicals. The cancer risk for exposure to coal ash is nine times worse than smoking a pack of cigarettes a day. Despite this, Ohio already excludes all coal ash from regulation by classifying it as “nontoxic.” Kasich’s plan would “encourage solid waste landfill management” of coal waste, as though it were as safe as a milk carton, sending it straight to the local landfill.
— Paul Ryder, Assistant Director, Ohio Citizen Action
The International Coal Group mine remains idle in Sago, West Virginia. The mine has remained closed since an explosion on January 2nd, 2006 killed 12 miners.
NEW YORK, NY — “In the world of energy politics, the sudden vanishing of the word ‘coal’ is a remarkable and unprecedented event.
As anyone who is reading this surely knows, there is no energy source that is more emblematic of the past than coal. We still burn nearly a billion tons of it a year in America, almost all of it to generate electricity. But it is a dirty, inefficient, planet-cooking fuel whose supporters have pushed into the 21st Century with slick ads for “clean coal,” an army of high-powered lobbyists, and big checks for politicians. And until recently, it’s worked. The secret of Big Coal’s success has always been its political power. In the regions where it is mined and burned, coal mining companies – as well as the railroads that haul it and the power companies that burn it – are deeply wired into state and local governments. They have worked long and hard to convince the hacks in city halls and state houses that their economic future depends on burning more and more coal, and that any shift away from coal, or, worse, any crackdown on environmental regulations, will bring about not just economic chaos, but blackouts.
Nowhere has the political power of coal been more obvious than in presidential campaigns. The conventional wisdom has always been that if you want a seat in the Oval Office, you need Big Coal states like Ohio, Pennsylvania, and Illinois. And to win them, you need to buy into the myth that we are going to power the 21st Century pretty much the same way we powered the 19th.”
Letters to Senator Sherrod Brown and Senator Rob Portman
6,615 members have sent handwritten letters and petitions to Senator Brown urging him to support US EPA rules that will protect our health from polluting coal plants as of January 24, 2012.
3,751 members have petitioned Senator Portman urging him to support US EPA rules that will protect our health from polluting coal plants as of January 24, 2012.
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