Dive Brief:

• American Electric Power, Duke Energy and FirstEnergy, three of Ohio’s four major utilities, want state regulators to roll back deregulation by guaranteeing profits on about a third of their power plants.
• The plants will otherwise be shuttered. Initial customer costs from the policy change will protect jobs and system reliability in the short term, the utilities argue, and provide savings when electricity prices rise.
• If approved by the Public Utility Commission of Ohio (PUCO), the proposal would reverse the 15-year PUCO effort to phase out regulated rates and leave utilities with regulated pricing at some plants and market-driven pricing at others.

Dive Insight:

Because of revenue losses to falling electricity demand caused by the recession and increased use of distributed generation and energy efficiency, FirstEnergy reversed its stand and joined AEP’s call for regulation instead of shuttering coal plants in response to federal pollution and emissions regulations and to coal’s diminished price-competitiveness against low-priced natural gas-generated and wind-generated electricity.

Dayton Power & Light, the state’s fourth major utility, supports the other utilities’ proposal but has not asked for regulated rates. FirstEnergy and AEP say regulated rates, if approved, would not cause them to reverse already-announced coal plant closures.

The proposal would cover the Kyger Creek Plant, in which FirstEnergy, AEP and Duke hold stakes, as well as FirstEnergy’s Davis-Besse Nuclear Power Station and its W.H. Sammis coal plant. FirstEnergy consumers will pay $3 to $4 monthly more in the 15-year plan’s first year and provide the utility with a guaranteed 7% profit.

The Sierra Club Beyond Coal campaign has launched a media attack condemning the policy change. The Retail Energy Supply Association, a national trade group for unregulated energy marketers, also opposes increased regulation.