Dive Brief:
- American Electric Power filed a proposal with the Public Utilities Commission of Ohio to add a $2 per month charge to its typical customer’s bill for costs of generation from four coal plants that, because of the cost of pollution controls, would otherwise operate at a loss at current electricity market prices.
- AEP Ohio President/COO Pablo Vegas said the charge, which would be imposed in June, is needed because of electricity market deregulation, flawed capacity markets, and “increasingly onerous” environmental regulations. AEP customers will get a bill credit if market changes make the plants profitable. The utility predicts net savings over the next 10 years if the plants remain in operation.
- Without the extra income, AEP said, it might shutter some or all of the plants, costing up to about 1,100 jobs and 2,671 megawatts of generation capacity, enough to make Ohioans vulnerable to electricity disruptions or power price spikes like those during last winter’s polar vortex.
Dive Insight:
AEP is asking for price guarantees on the 1,149 megawatt Conesville plant, the 600 megawatt Stuart plant, the 592 megawatt Cardinal plant, and the 330 megawatt Zimmer plant. AEP would still have 4,000 megawatts of unsubsidized Ohio capacity competing in electricity markets, not counting several plants scheduled for shuttering.
FirstEnergy and Duke Energy also asked Ohio regulators for guaranteed prices to help them cope with deregulated electricity markets and the costs of meeting current environmental regulations.
Ohio insiders say the PUCO will wait until after the November election to rule on the utilties’ requests.
Exelon asked Illinois regulators for a similar subsidy for the costs of its nuclear generation.
The AEP plan is opposed by Ohio environmentalists and consumer advocates.
