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10 hours ago
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Why an Ohio ban on settlements to close ‘base load' power plants matters for clean energy
Aerial photograph of the OVEC-operated Kyger Creek Power Plant in Cheshire. (Getty Images.) This story was originally published by Canary Media. A decade ago, the Sierra Club and other environmental groups, trade organizations, and companies found themselves in a regulatory standoff with American Electric Power over operating costs for six coal-fired power plants in Ohio. The utility's opponents objected to letting the company collect more money from customers to keep the unprofitable plants running, while the utility argued the charges were a hedge against even higher costs. Before state regulators made a decision, the utility and some of its opponents announced a compromise. As part of the deal, the Sierra Club would drop its opposition in exchange for AEP's commitment to add more solar and wind to its portfolio as well as move up its timeline for closing or converting several coal plants to natural gas. A Sierra Club representative at the time described it as 'nowhere near a perfect deal' but as one that would significantly reduce carbon emissions and accelerate the state's clean energy transition. Such compromises will now be prohibited in Ohio under a new state law that forbids settlements involving the closure of 'base load' power plants. Proponents of House Bill 15, signed by Republican Gov. Mike DeWine in mid-May, say it will support the state's ever-growing power needs and promote competition within its energy sector. Yet critics are questioning the law's definition of 'base load' generating facilities: It only covers electricity sources that run primarily on nonrenewable fuels such as natural gas or nuclear. The definition excludes wind or solar power, even when combined with battery storage. Negotiating special deals in settlements has long been common in utility regulatory cases. Industry groups or companies have gotten discounts and other benefits in return for dropping opposition to utilities' added charges. Parties in court cases often settle before trial, too. For example, the same year that the Sierra Club reached a settlement with AEP, a trade group representing industrial customers negotiated a special rate with FirstEnergy's Ohio utilities in exchange for dropping opposition to a customer-funded bailout of that company's unprofitable coal and nuclear plants. (The secret terms of that agreement were part of a criminal case filed last year against Ohio's former chief utility regulator, Sam Randazzo. They also became part of a House Bill 6-related regulatory case on which regulators will finally hear evidence this month.) HB 15 will still allow settlements with special deals, as long as terms are part of the public record, there's no cash payment, and they do not close or limit 'base load' electricity-generating facilities. Neil Waggoner, who heads the Sierra Club's Beyond Coal campaign for the Midwest region, suspects the provision is likely a backlash to the environmental group's 2015 settlement with AEP. That deal didn't end up delivering all of the expected clean energy benefits. State rules requiring wind turbines to be a certain distance from other properties ultimately made it impossible for AEP to add the planned 500 megawatts of wind generation, and the Public Utilities Commission of Ohio refused to allow the utility to charge customers the cost of building 400 MW of solar energy. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX The 'base load' provisions weren't part of HB 15 as it originally passed the House, nor were they in the initial versions of the companion Senate bill, SB 2. The language appeared in a substitute version of SB 2 introduced on March 11, the same day that Ed Spiker, chair of the Ohio Coal Association, submitted written testimony pleading the state to enact 'guardrails to ensure current coal power plants are not forced to close.' The terms used in SB 2 included natural gas and nuclear in the definition of a 'base load electric generating facility' but not renewables. The Senate then added the provisions to HB 15 before passing it this spring. The law suggests Republicans' continuing willingness to prop up conventional power plants, even when their electricity may cost more than cleaner sources of power. 'How would you replace base load power generation, given the amount of megawatts that they produce that we certainly require?' Sen. Jerry Cirino, R-Kirtland, challenged one witness who spoke against nuclear power plants during a March 11 hearing held by the Senate Energy Committee. Yet electricity from coal and nuclear plants remains relatively expensive, compared to that from renewables or natural gas. Ashley Brown, a former state utility regulator, questioned the constitutionality of the new settlement restrictions. 'I don't know how they can tell somebody you can't shut down a plant,' he told Canary Media. Two weeks ago, the Trump administration ordered a retiring Michigan coal plant to stay open, although it's unclear whether the mandate will face a court challenge. Separately, regional grid operator PJM Interconnection has sometimes issued orders to keep power-generation facilities running to maintain grid reliability, as it did for former FirstEnergy coal plants. In that case, however, the company was paid to keep the plants open. Waggoner noted that HB 15's language only applies to settlements. Its terms wouldn't stop a company from closing an unprofitable plant on its own accord. HB 15 also finally revokes subsidies for two 1950s-era coal plants, which had been put in place by HB 6, the 2019 law at the heart of an ongoing public corruption scandal in Ohio. Yet Beth Nagusky, an adjunct law professor at Case Western Reserve University, wonders whether the provision preventing settlements that close 'base load' power plants is meant to lay the groundwork for new subsidies down the road for nuclear and coal plants, which might become involved in regulatory or judicial cases. 'I don't think that's even being hidden,' Waggoner said. Along the same lines, environmental groups have criticized laws from 2023 and 2024 that include natural gas and nuclear power in the state's definition of 'green energy.' As Waggoner sees it, utilities and policymakers who claim to be worried about maintaining enough 'base load' or 'dispatchable' electricity are concerned less about real reliability issues and more about minimizing the importance of renewable energy in the face of climate change, even when renewables are paired with storage. 'They're looking at how do you frame this argument so you're not just saying, 'We don't want renewables,'' Waggoner said. 'They're trying to find a way to justify what they want, as opposed to what the moment demands.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
10 hours ago
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How sensors, software, and other tech could help Ohio's aging power grid
A new state law will require Ohio utilities and regulators to consider how technology might offer cost-effective options for improving the state's aging electric grid. Ohio's grid, like those in many states, faces rising repair and maintenance costs, growing demand from data centers and other new customers, and increased risks as climate change fuels more frequent severe weather and outages. House Bill 15, signed last month by Republican Gov. Mike DeWine, calls for a focus on software and hardware solutions to boost the safety, reliability, efficiency, and capacity of existing infrastructure. Clean energy advocates are hopeful the investments will also allow the grid to accommodate more renewable energy and battery storage projects, which can suffer costs and delays related to transmission bottlenecks. 'This is a really, really great inclusion in the bill,' said Chris Tavenor, an attorney at the Ohio Environmental Council, an advocacy group. Advanced transmission technologies that utilities must contemplate under HB 15 include things like sensors that allow lines to safely carry more electricity when conditions are favorable, a concept known as dynamic line rating. Digital controllers can remotely adjust the amount of power flowing through different parts of the grid, while topology optimization software can reroute power around congested areas, like a navigation app for electricity. A key benefit of these technologies is that they can be used with existing infrastructure. When wires do need to be replaced, advanced conductors provide an energy-saving option. Those conductors use carbon composites or other materials to carry more electricity with less loss of that energy, compared to traditional wires of similar diameter. A high-tech approach can create space on the grid for more renewable energy to come online. That would lessen the need to run expensive, polluting coal-fired power plants, said Rob Kelter, a senior attorney with the Environmental Law & Policy Center, a legal advocacy organization based in the Midwest. Besides helping to mitigate climate change, less pollution would help people's health as well, Tavenor said. Under HB 15, owners of high-voltage power lines must file annual reports showing which advanced transmission technologies they considered as part of their five-year forecasts. Those companies will also need to identify areas of the grid with congestion, and compare the cost of addressing it with traditional versus advanced technologies. The reports will be available to the public, and interested parties may ask the Public Utilities Commission of Ohio to hold a hearing on whether utilities properly reported transmission information and whether they should be able to recover costs from customers. The Ohio Power Siting Board must also require companies to consider technology solutions before it approves any new transmission projects. Companies would have to file reports and expert testimony to support any decision to forego advanced technologies in favor of conventional projects, Kelter said. Advocacy groups and other stakeholders 'would have a chance to similarly argue that those technologies are available and that they're cost-effective, and that they would be able to alleviate congestion and delay the need for new transmission lines,' Kelter added. The law requires the Public Utilities Commission of Ohio to study the costs and benefits of the various technologies, including how to streamline their deployment. That report will be due by March 1 next year. Some Ohio utilities have already been exploring the potential for advanced transmission technologies. In 2023, AES installed 42 dynamic-line-rating sensors at towers along five transmission lines owned by its Ohio and Indiana utilities. The companies shared early results last year showing that installing the sensors was cheaper and faster than replacing power lines, and using the sensors increased the system's electricity-carrying capacity. American Transmission Systems, a subsidiary of FirstEnergy, is planning to spend nearly $900 million on dozens of transmission projects across Ohio in the coming years. 'We are currently reviewing House Bill 15 and exploring how its provisions around advanced transmission technologies could be integrated into our planning to strengthen the power grid for Ohio customers,' said FirstEnergy spokesperson Lauren Siburkis. Many of the law's potential benefits hinge on how the Ohio Power Siting Board and Public Utilities Commission of Ohio implement its terms when making decisions on siting and electric rates, Tavenor noted. The law's advanced technology provisions only apply to high-voltage parts of the grid that move electricity over long distances. It doesn't require utilities to consider high-tech approaches to improving the local distribution lines that deliver electricity to homes and businesses. So, for example, AEP Ohio won't need to consider advanced transmission technologies in its latest rate case filed on May 30, spokesperson Laura Arenschield said. That's because AEP wants to use the 2.14% increase in base rates to pay for improvements to its local distribution system, not the AEP transmission network. Similarly, the new law won't address grid inequities affecting disadvantaged communities in FirstEnergy's Ohio territory, which the Interstate Renewable Energy Council described in a report released earlier this year. Even so, investments that use existing system capacity more effectively can still promote equity by reducing the need to build all-new transmission lines. Siting such infrastructure 'can be incredibly invasive and inequitable, harming both communities and ecosystems,' said report author Shay Banton, who is a regulatory program engineer and energy justice policy advocate at the Interstate Renewable Energy Council. Building less brand-new transmission can also save consumers money. Ohioans have generally paid for transmission maintenance and upgrades through a 'rider' on their bills. For the average AEP Ohio consumer, that extra charge is roughly $40 per month. HB 15, however, aims to get rid of single-issue riders, so in the future, utilities will instead have to consider transmission costs through rate cases that consider all utility costs and expenses and are heavily scrutinized by regulators. That could also lead to lower costs or at least smaller increases. 'Ohio utility consumers already are burdened by billions in utility transmission projects,' said Maureen Willis, who represents the interests of Ohio's utility customers in her role as the state's consumers' counsel. 'By adopting advanced transmission technology, these costs can be reduced, staving off unnecessary 'gold-plating' by utilities, giving consumers more bang for the buck. We strongly advocate for this approach to transmission spending.'
Yahoo
03-06-2025
- Business
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Why an Ohio ban on settlements to close 'base load' power plants matters for clean energy
A decade ago, the Sierra Club and other environmental groups, trade organizations, and companies found themselves in a regulatory standoff with American Electric Power over operating costs for six coal-fired power plants in Ohio. The utility's opponents objected to letting the company collect more money from customers to keep the unprofitable plants running, while the utility argued the charges were a hedge against even higher costs. Before state regulators made a decision, the utility and some of its opponents announced a compromise. As part of the deal, the Sierra Club would drop its opposition in exchange for AEP's commitment to add more solar and wind to its portfolio as well as move up its timeline for closing or converting several coal plants to natural gas. A Sierra Club representative at the time described it as 'nowhere near a perfect deal' but as one that would significantly reduce carbon emissions and accelerate the state's clean energy transition. Such compromises will now be prohibited in Ohio under a new state law that forbids settlements involving the closure of 'base load' power plants. Proponents of House Bill 15, signed by Republican Gov. Mike DeWine in mid-May, say it will support the state's ever-growing power needs and promote competition within its energy sector. Yet critics are questioning the law's definition of 'base load' generating facilities: It only covers electricity sources that run primarily on nonrenewable fuels such as natural gas or nuclear. The definition excludes wind or solar power, even when combined with battery storage. Negotiating special deals in settlements has long been common in utility regulatory cases. Industry groups or companies have gotten discounts and other benefits in return for dropping opposition to utilities' added charges. Parties in court cases often settle before trial, too. For example, the same year that the Sierra Club reached a settlement with AEP, a trade group representing industrial customers negotiated a special rate with FirstEnergy's Ohio utilities in exchange for dropping opposition to a customer-funded bailout of that company's unprofitable coal and nuclear plants. (The secret terms of that agreement were part of a criminal case filed last year against Ohio's former chief utility regulator, Sam Randazzo. They also became part of a House Bill 6-related regulatory case on which regulators will finally hear evidence this month.) HB 15 will still allow settlements with special deals, as long as terms are part of the public record, there's no cash payment, and they do not close or limit 'base load' electricity-generating facilities. Neil Waggoner, who heads the Sierra Club's Beyond Coal campaign for the Midwest region, suspects the provision is likely a backlash to the environmental group's 2015 settlement with AEP. That deal didn't end up delivering all of the expected clean energy benefits. State rules requiring wind turbines to be a certain distance from other properties ultimately made it impossible for AEP to add the planned 500 megawatts of wind generation, and the Public Utilities Commission of Ohio refused to allow the utility to charge customers the cost of building 400 MW of solar energy. The 'base load' provisions weren't part of HB 15 as it originally passed the House, nor were they in the initial versions of the companion Senate bill, SB 2. The language appeared in a substitute version of SB 2 introduced on March 11, the same day that Ed Spiker, chair of the Ohio Coal Association, submitted written testimony pleading the state to enact 'guardrails to ensure current coal power plants are not forced to close.' The terms used in SB 2 included natural gas and nuclear in the definition of a 'base load electric generating facility' but not renewables. The Senate then added the provisions to HB 15 before passing it this spring. The law suggests Republicans' continuing willingness to prop up conventional power plants, even when their electricity may cost more than cleaner sources of power. 'How would you replace base load power generation, given the amount of megawatts that they produce that we certainly require?' Sen. Jerry Cirino, R-Kirtland, challenged one witness who spoke against nuclear power plants during a March 11 hearing held by the Senate Energy Committee. Yet electricity from coal and nuclear plants remains relatively expensive, compared to that from renewables or natural gas. Ashley Brown, a former state utility regulator, questioned the constitutionality of the new settlement restrictions. 'I don't know how they can tell somebody you can't shut down a plant,' he told Canary Media. Two weeks ago, the Trump administration ordered a retiring Michigan coal plant to stay open, although it's unclear whether the mandate will face a court challenge. Separately, regional grid operator PJM Interconnection has sometimes issued orders to keep power-generation facilities running to maintain grid reliability, as it did for former FirstEnergy coal plants. In that case, however, the company was paid to keep the plants open. Waggoner noted that HB 15's language only applies to settlements. Its terms wouldn't stop a company from closing an unprofitable plant on its own accord. HB 15 also finally revokes subsidies for two 1950s-era coal plants, which had been put in place by HB 6, the 2019 law at the heart of an ongoing public corruption scandal in Ohio. Yet Beth Nagusky, an adjunct law professor at Case Western Reserve University, wonders whether the provision preventing settlements that close 'base load' power plants is meant to lay the groundwork for new subsidies down the road for nuclear and coal plants, which might become involved in regulatory or judicial cases. 'I don't think that's even being hidden,' Waggoner said. Along the same lines, environmental groups have criticized laws from 2023 and 2024 that include natural gas and nuclear power in the state's definition of 'green energy.' As Waggoner sees it, utilities and policymakers who claim to be worried about maintaining enough 'base load' or 'dispatchable' electricity are concerned less about real reliability issues and more about minimizing the importance of renewable energy in the face of climate change, even when renewables are paired with storage. 'They're looking at how do you frame this argument so you're not just saying, 'We don't want renewables,'' Waggoner said. 'They're trying to find a way to justify what they want, as opposed to what the moment demands.'
Yahoo
29-05-2025
- Business
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Why the solar industry is counting Ohio's newest energy law as a win
A new state law aimed at expanding gas and nuclear power plants in Ohio may also provide opportunities for solar developers — if they can overcome other policy and political barriers. Solar industry advocates say House Bill 15, signed by Republican Gov. Mike DeWine in mid-May, contains several technology-neutral provisions that could benefit clean energy projects, including property tax breaks for siting them on brownfields and former coal mines. The law also loosens restrictions on behind-the-meter electricity generation and lowers the overall tax burden for new power plants. 'This is just smart economic development. We need the energy,' said Michael Benson, board president of Green Energy Ohio, whose members include a variety of clean energy companies. In his view, a market-based approach should work in favor of renewables and battery storage, which can generally be deployed more quickly and cheaply than power plants that burn fossil fuels. Much of the public discussion around the legislation focused on its repeal of coal plant subsidies mandated by HB 6, the 2019 law at the heart of Ohio's ongoing public corruption scandal. HB 15 also will end the use of 'electric security plans,' which let utilities add special charges to customer bills without reviewing all revenue and expenses in a full rate case. But many of the measures in HB 15 are meant to encourage new electricity production in the state. 'We should open the market to dispatchable energy generation to address future energy shortages,' the bill's primary sponsor, Rep. Roy Klopfenstein (R-Haviland), said in his February testimony, in which he also noted growing energy demand from data centers and other large electricity users, and energy supply issues raised by grid operator PJM Interconnection. The term 'dispatchable' is often used to refer to power plants that can be turned on or off as demand requires, as opposed to solar or wind without battery backup. Most of the law's incentives for new energy production are technology-neutral, however. Under HB 15, new electricity production on brownfields and minelands designated as priority investment areas will be exempt from property taxes for five years. Grants of up to $10 million each will be available to clean up or prepare the sites for construction. And the Ohio Power Siting Board will speed up its review of energy projects in those areas. 'It's a huge opportunity,' said Rebecca Mellino, a climate and energy policy associate for The Nature Conservancy in Ohio. Last year the organization estimated that Ohio has more than 600,000 acres of minelands and brownfields suitable for renewable energy production. The sites often have good access to roads and transmission lines, too. As Mellino sees it, solar in priority areas would avoid objections raised by some people about displacing farmland. And counties with renewable energy bans could presumably modify them to allow development in priority investment areas without affecting other parts of their jurisdictions, she suggested. The law also removes a restriction that has required behind-the-meter generation to be located on the premises of the customer who is using the power. The change might allow data centers to tap into gas-fired backup generators on an adjacent property, for example. But it could also create new opportunities for clean energy-powered microgrids, in which a group of customers share solar panels and a large battery. 'That is significant, all by itself,' because it provides more flexibility, said Dylan Borchers, an energy attorney with law firm Bricker Graydon in Columbus, Ohio. Just as importantly, the law 'allows essentially a portfolio approach for customers and energy resources.' In other words, multiple businesses could form a shared 'self-power' system with equipment for electricity generation or battery storage on adjacent land or on premises controlled by one or more of them. Such a system could include numerous generation or storage facilities, allowing a cluster of data centers, factories, or other large energy users to combine multiple behind-the-meter resources, whether they be natural gas, solar, batteries, or small nuclear when it becomes available. The ability to combine resources means customers wouldn't necessarily need lots of land to add renewable energy, said Benson. 'If you want the most power quickly and cleanly, you can use rooftops and parking lots and build out a lot of small-scale generation.' The law also reduces the overall tax burden for new electricity production. Local governments may collect less revenue but still welcome the jobs and other spending that come with new energy investments. And less stringent requirements might even benefit some communities when new power generation is sited, Borchers suggested. Ohio's current tangible personal property tax rates have been so high that companies have often used 'payments in lieu of taxes,' also known as PILOT programs, to avoid getting walloped by huge tax bills as soon as energy production starts. But counties face somewhat strict requirements for how they must allocate PILOT payments. Developers that take advantage of the lower tax rates available under HB 15 may have more financial flexibility to be able to fund some projects that local governments want most, such as a new fire station or community center, Borchers said. Taken together, the provisions in HB 15 promise to make it easier to build more solar in the state, industry representatives say. The governor and legislature saw 'the urgent need to expand energy generation as Ohio confronts rapidly increasing demand and the threat of escalating costs and supply shortages,' said Will Hinman, executive director for the Utility Scale Solar Energy Coalition of Ohio. 'House Bill 15 is a critical step towards addressing these challenges by reducing barriers to energy development — including utility-scale solar projects.' The law still requires projects to meet multiple criteria to benefit from its provisions. For example, power-generating facilities and transmission lines exceeding certain thresholds may need approval from the Ohio Power Siting Board. The state's director of development must approve local governments' designations of priority investment areas. And self-power systems have to be independent of the main power grid. The biggest downside is that the new law left in place a 2021 statute, Senate Bill 52, which requires utility-scale renewable energy developments to get local approval, said Molly Bryden, a climate and sustainability researcher with think tank Policy Matters Ohio. Under that earlier law, 34 of Ohio's 88 counties have banned new solar generation in all or part of their territories. Even where the local law doesn't bar a new project, local officials can still block projects before a developer even seeks a permit from the Ohio Power Siting Board. A county representative and a township representative also get to vote with state siting board members on whether facilities get a permit, even for some projects that were in the grid operator's queue before the 2021 law. Another law took effect in early 2023, letting local governments limit small solar and wind projects that connect to the grid but don't otherwise fall within the scope of the 2021 law. Requirements of the 2021 and 2023 laws don't apply to generation fueled by natural gas, coal, or nuclear power. And Ohio's high court has ruled local governments can't ban or regulate gas wells and related infrastructure or even enforce broader zoning laws that would prevent such development. Lawmakers also cut out provisions from an earlier version of HB 15 that would have allowed community solar development. Community solar lets residential customers save money by sharing the electricity from a local solar array, which doesn't have to be on their own property. 'There's still a real need for permitting reform,' Bryden said.
Yahoo
13-05-2025
- Business
- Yahoo
Ohio's power grid operator warns of potential power shortages this summer
COLUMBUS, Ohio (WCMH) — A power grid operator for Ohio and other states said plenty of resources are available to meet typical peak summer electricity demand but warned that there are 'extreme scenarios' in which generation capacity may fall short. PJM, a regional transmission organization that coordinates the movement of electricity across Ohio and 12 other states, said it expects summer usage to peak at about 154,000 megawatts. The company said one megawatt can power about 800 homes. Ohio again ranks among worst states in country in list by U.S. News & World Report The company expects to have enough reserves to meet that demand, but noted it's the first time in PJM's annual assessment that 'generation capacity may fall short of required reserves in an extreme planning scenario that would result in an all-time PJM peak load over 166,000 MW.' The company is concerned about the imbalance of supply and demand due to the lack of building new resources and generator retirements. 'This outlook at a record peak heat scenario reflects our years-long and mounting concerns as we plan for enough resources to maintain grid reliability,' Executive Vice President of Operations, Planning and Security Aftab Khan said in a statement. 'All resources within PJM's footprint should be prepared to respond when called upon.' If the 'extreme scenario' were to happen, PJM would use 'contracted demand response programs' to meet its needs. 'Demand response programs pay customers who have opted in to reduce their electricity during system emergencies,' PJM said. Amendment to eliminate Ohio property taxes moves one step closer to voters The National Weather Service expects the summer months to be hotter than normal along parts of the East Coast. PJM said it has about 179,200 megawatts of generation capacity over the summer, plus another 7,900 megawatts of contracted demand response resources. PJM's long-term load forecast predicts a massive jump in peak demand over the next 15 years. 'This forecast captures the dramatic increases in future energy demand, as evidenced by the last two years when data center development has grown exponentially,' Khan said. AEP Ohio has blamed PJM for customer bill increases that will go into effect in June. PJM does not generate electricity, but coordinates how electricity is transmitted to help meet electricity demand. 'In a recent auction, the entire PJM region saw significant increases in the price of electricity generation capacity compared with previous auctions,' AEP Ohio stated. 'This cost is always passed to customers dollar-for-dollar, with no markup or profit for AEP Ohio.' Amendment to eliminate Ohio property taxes moves one step closer to voters AEP estimates that beginning in June, customers who use 1,000 kWh of electricity per month would see their monthly bills increase by about $27. Ohio lawmakers recently passed House Bill 15 — awaiting Gov. Mike DeWine's signature — which aims to address energy shortages and growing demand. It would also repeal the remaining portions of HB 6 (2019), which landed the state's former speaker of the House in federal prison. The remaining portions subsidize two Ohio Valley Electric Corporation coal plants on the backs of Ohio ratepayers. One of the plants is in Ohio, the other in Indiana. The Ohio Consumers' Counsel estimates that the amount Ohioans have paid since January 2020 is more than $464 million to date. Ohio Republican leaders have been at odds since the scandal unfolded about the remaining portions of the law. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
