PUCO Approves FirstEnergy, AEP Rate Guarantees

PUCO Approves FirstEnergy, AEP Rate Guarantees
Tying a bow on a long-running debate in Columbus, the Public Utilities Commission of Ohio this week approved an "income guarantee" proposal for FirstEnergy and AEP — two energy companies that sought rates that will keep certain power plants open through May 2024. (For FirstEnergy, those plants are the Davis-Besse nuclear power plant near Toledo and the coal-fired W.H. Sammis power plant [see photo] on the Ohio River.)

Columbus Business First published a great article on the decision. A brief excerpt on the fixed-rate factor for ratepayers:
The $16.5 billion AEP and $15 billion FirstEnergy described the plans as price hedges in case natural gas power prices go up. They said the plants are more reliable than gas, the fuel that's increasingly replacing coal and nuclear because of its price and abundance in U.S. shale plays.
Whatever costs might be needed to keep the companies' six coal-powered plants and one nuclear plant in working condition for the next eight years will fall to ratepayers — regardless of market fluctuations and the ongoing (if glacially paced) push for greater access to renewable energy in Ohio.

"For now, we can say that this decision by the Public Utilities Commission of Ohio deals a hard blow to FirstEnergy’s customers and represents a step backward for Ohio at a time when other states are transitioning to cleaner, cheaper sources of energy," Jen Miller, director of the Sierra Club’s Ohio Chapter, said in the wake of the decision. "The Commission’s decision harms customers by forcing them to subsidize aging, costly coal and nuclear plants, while guaranteeing profits for FirstEnergy’s shareholders. This decision keeps Ohio tied to outdated, inefficient, energy sources that cost too much and negatively impact our health."