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Ohio Utility Bailouts

bailoutnewsbuttonDuke Energy, AEP, and FirstEnergy teamed up to file proposals with the Public Utilities Commission of Ohio (PUCO) in 2013 and 2014 to get permission to raise consumer rates and use the profits to cover the costs of seven coal plants and one nuclear plant. These energy companies want to shift the cost of these outdated power plants to consumers because they are no longer competitive in the free market. Two of the four bailout requests were denied by the Public Utilities Commissioners in 2015, one for Duke Energy and the other for AEP. FirstEnergy’s request includes the Sammis coal plant, Davis-Besse nuclear plant, and FirstEnergy’s share of the jointly owned Clifty Creek and Kyger Creek plants. AEP ‘s expanded request includes the Stuart, Zimmer, Conesville, and Cardinal coal plants as well as their share of the Kyger Creek and Clifty Creek plants that were denied in their first filing.

If the plans stand up to legal and regulatory challenge, ratepayers will be forced to pay the utilities specifically for the power from these coal-fired and nuclear power plants. This request is a bailout because they are asking the PUCO to be allowed to have a “Purchase Power Agreement.” Customers would have to purchase power from these plants. These plants are well beyond their prime, and they cannot compete economically or environmentally in the free market. As filed, it is “nonbypassable” – meaning that even if you have chosen a different provider, you still have to pay the increased rates.

If these utilities were able to sell this generation capacity at a profit on the open market, they wouldn’t be asking for customers to bail these facilities out. Millions of Ohio consumers paid billions of dollars to these same utilities for their transition to deregulated power plants, under a 1999 Ohio law. Fifteen years later, they are again asking consumers to pay charges related to the power plants. They’ve made it clear in their filings that if they don’t get this request, these plants could be forced to retire.

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