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.
Todd A. Snitchler
Principal, Vorys Advisors LLC
Office: 614-464-6222 Cell: 330-316-7492
President, Siefkas Public Relations LLC
Office: 614-486-3100 Cell: 614-404-4374