For immediate release December 14, 2015

Energy industry forms alliance to fight utility bailouts

AEP agreement is the latest raw deal for Ohio consumers

Columbus, OH – Leading companies in Ohio’s energy industry today announced the formation of the Alliance for Energy Choice to oppose utility company deals with the Public Utilities Commission of Ohio (PUCO) that, according to projections, will cost some customers billions of dollars over eight years.

The group of eight energy generators and suppliers denounced the power purchase agreement reached today with AEP that would require ratepayers to subsidize the utility’s unprofitable power plants. The group also opposes the settlement announced last week with FirstEnergy that guarantees subsidies that could cost ratepayers as much as $3.9 billion over eight years.

The Alliance has retained former PUCO Chairman Todd Snitchler to organize the campaign calling on PUCO commissioners to reject rate settlements negotiated by PUCO regulatory staff.

“If FirstEnergy’s deal is a corporate bailout, AEP’s deal is a corporate handout,” Snitcher said.

“Under this deal, AEP is guaranteed a profit paid for by hard-working consumers and businesses that are just now emerging from an economic recession,” Snitchler said. “All AEP and FirstEnergy customers will get stuck footing the bill for both of the companies despite the fact that other electric power generating companies are successfully competing in the market without subsidies or support.

“The PUCO will be helping utilities take money out of the pockets of Ohio residents, including older adults on fixed incomes, faith-based organizations and non-profits, and handing it over to the companies and their shareholders,” he said. “Ohio regulators should say no and instead continue to let the competitive marketplace determine which companies are winners and losers.”

Snitchler pointed out that ratepayers have shouldered the burden for the companies’ power plants since many were built more than 50 years ago. What is more, ratepayers have already paid for the assets through rate recovery and again through stranded cost recovery when Ohio introduced competition in the electricity market. In the case of FirstEnergy, nearly $7 billion in stranded costs were recovered from ratepayers.

A level playing field where energy suppliers compete also boosts Ohio’s economy by lowering businesses’ operating costs and encouraging investment without burdening ratepayers. Forcing businesses and residents to subsidize companies that do not need and should not receive subsidies makes Ohio less attractive to future investment from all kinds of industries.

Some of the largest investments in Ohio in the past four years have come from independent electric power generators that have built cleaner, more efficient, and lower-cost power plants. Snitchler contends, “If PUCO commissioners approve these deals, they’re sending the signal that Ohio is closed for business. Energy companies like the Alliance members will turn elsewhere to invest, innovate, and hire. Regulators will turn the lights out on construction of new, cleaner, cheaper natural gas-fired generation, despite more than $5 billion and nearly 6,000 megawatts of new generation under construction and already planned for Ohio,” Snitcher said.

“What is worse, Ohio is uniquely situated to see significant investment in new generation construction based on low-cost gas, access to water, and the ability to tie into a robust transmission infrastructure,” Snitchler said. “These decisions could fundamentally alter the competitive landscape and leave ratepayers on the hook for investments others are already willing to make without subsidies.”

The case remains pending before the PUCO with briefs yet to be filed. Decisions on AEP and FirstEnergy cases are expected sometime in the first quarter of 2016.

About the Alliance for Energy Choice: The Alliance for Energy Choice is an Ohio non-profit corporation that seeks to promote fairness and competition among electric utilities. The Alliance advocates for market solutions that will ensure adequate and fairly priced supply of electric power to Ohio’s residents and businesses. The Alliance also advocates for a level playing field for energy companies that does not favor one supplier over another.

Alliance members as of December 14, 2015: Advanced Power, Calpine, Dynegy, Energy Professionals of Ohio, NRG Energy, PSEG Energy Resources & Trade, Retail Energy Supply Association (RESA), and Talen Energy.

 

Contacts:

Todd A. Snitchler
Principal, Vorys Advisors LLC

Office: 614-464-6222    Cell: 330-316-7492

tasnitchler@vorysadvisors.com

 

Linda Siefkas
President, Siefkas Public Relations LLC

Office: 614-486-3100    Cell: 614-404-4374

linda@siefkaspr.com

 

Read more below

For immediate release December 17, 2015

Alliance for energy choice shoots down utilities' reliability claims

(COLUMBUS) Ohioans can be confident that their homes will be warm and businesses’ lights will be on this winter and in the coming years, despite the claims by AEP and FirstEnergy that Ohio’s electrical supply is unreliable and uncertain. The Alliance for Energy Choice today criticized the utilities for misleading the public as a ploy to get the Public Utilities Commission of Ohio (PUCO) to agree to billions of dollars in customer charges to prop up their inefficient and money-losing coal-fired and nuclear power plants.

PJM Interconnection, which coordinates the transmission of electricity across 13 states, including Ohio, responded today to the controversial power purchase agreements under review by the PUCO.

According to PJM’s statement, The record in Ohio shows that PJM’s markets have, since their inception, succeeded in providing reliable, competitively priced wholesale electricity.

Alliance spokesperson Todd A. Snitchler said, “AEP’s and FirstEnergy’s effort to sow fear about reliability is nothing more than a smoke screen to hide their true intent. System reliability is one of the principal justifications for billions in customer-paid subsidies, and that argument is simply false. As recently as this summer, PUCO Chairman Porter told the utilities to stop scaring people with this issue.” In addition, he pointed out, in September the companies received significant financial compensation from PJM to ensure reliable power supply through May 2019.

The utilities have threatened to shut down their uneconomical plants if PUCO commissioners don’t approve the agreements. The good news is that the utilities’ plants are committed to run until at least May 2019, and independent suppliers are constructing new generation to replace units that have closed, with more new generation planned,” Snitcher said. “These independent suppliers have invested billions of dollars in Ohio to build new, more efficient plants capable of providing reliable electricity at a lower cost to Ohio residents and businesses.

New, cleaner power plants are coming online that will produce 6,000 megawatts of power, enough to fuel about 6 million homes with safe, reliable energy.

PJM statement: http://www.pjm.com/forms/registration/Meeting%20Registration.aspx?ID={DEB68248- DFBD-453F-8513-E82161A3D09A}

About the Alliance for Energy Choice: The Alliance for Energy Choice is an Ohio non-profit corporation that seeks to promote fairness and competition among electric utilities. The Alliance advocates for market solutions that will ensure adequate and fairly priced supply of electric power to Ohio’s residents and businesses. The Alliance also advocates for a level playing field for energy companies that does not favor one supplier over another. Alliance members as of December 14, 2015: Advanced Power, Calpine, Dynegy, Energy Professionals of Ohio, NRG Energy, PSEG Energy Resources & Trade, Retail Energy Supply Association (RESA), and Talen Energy.

 

Contacts:

Todd A. Snitchler,

Principal, Vorys Advisors LLC

Office: 614-464-6222     Cell: 330-316-7492

tasnitchler@vorysadvisors.com

 

Linda Siefkas,

President, Siefkas Public Relations

Office: 614-486-3100     Cell: 614-404-4374

linda@siefkaspr.com