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New utility settlement highlights how Ohio utilities are leaving FirstEnergy behind on clean energy

Dick Munson's picture
Former Director, Midwest Clean Energy Environmental Defense Fund

Dick Munson is EDF's Director, Midwest Clean Energy, where he focuses on creating new financing opportunities for efficiency, on ensuring smart meters provide the real-time data that will enable...

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  • Jul 13, 2018

A new utility settlement in Ohio is loaded with promising clean-energy components. Meanwhile, Ohio-based utility giant FirstEnergy continues to cling to the energy sources of the past.

Encouraging settlement

Along with FirstEnergy, Duke, and AEP, Dayton Power & Light (DP&L) is one of Ohio’s four investor-owned utilities that deliver electricity to people’s homes and businesses.

In DP&L’s recent rate case (a process that sets customers’ electricity delivery rates), the utility and environmental groups, including Environmental Defense Fund (EDF), have reached a settlement that includes the following:

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  • No unnecessary fixed cost increases: The utility wanted to significantly increase the fixed monthly charge for residential customers to $16.00 per month, but EDF and our allies negotiated that proposal down to $7.00 per month. Lower fixed costs help incentivize people to adopt energy efficiency and renewable energy because, without the higher fixed charge, they have a greater opportunity to save money.
  • More incentives to adopt clean energy measures: DP&L agreed to rate decoupling, or separating a utility's profits from its sales. Decoupling is a system that puts utilities in a better position to recover their costs, instead of basing utility rates on how much electricity they sell. Decoupling can encourage utilities to offer services like energy efficiency.
  • Electric vehicle (EV) infrastructure: DP&L agreed to provide up to $1 million to fund EV charging stations.
  • Prioritization of cost-effective clean energy: The utility will install renewable energy, energy efficiency, and battery storage in lieu of traditional grid upgrades (like building more substations and distribution lines) when the clean energy measures are more cost-effective than expanding the grid.

Stubborn FirstEnergy

While DP&L’s settlement is a step toward a cleaner, smarter energy system, FirstEnergy is doubling down on clunky, outdated power plants.

FirstEnergy’s old coal and nuclear units are no longer economic, in large part due to competition from cheap natural gas and, increasingly, from renewable energy. The utility has spent years trying to get taxpayers or ratepayers to bail out these plants, and the company isn’t done trying. In April alone, FirstEnergy spent $4 million on lobbying, including a renewed push for an Ohio law to bail out the utility’s struggling nuclear plants.

FirstEnergy already secured a bailout at the state level in 2016, when the Public Utilities Commission of Ohio handed over more than $600 million. We are challenging that deal – of which Ohioans have already paid near $200 million – at the Ohio Supreme Court.

Just a few years ago, Ohio’s other big utility, AEP, begged for bailouts as well. But recently, when asked about money-losing power plants, AEP’s CEO said, “We'll shut 'em down." The utility also committed to a settlement that will unlock millions in funding for EV charging stations, lower pollution, avoid unnecessary electricity bill increases, and provide customers with more clean energy options.

It seems Ohio’s other utilities are embracing change in the electricity industry and looking forward – except FirstEnergy.

For more on how Ohio can attract innovation and investment through clean energy, please see the new Powering Ohio report.

Republished with permission from the Environmental Defense Fund's Energy Exchange.

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