FirstEnergy Corp. wants the state utilities commission to rule on its proposed rate plan by March 31 — the latest the utility can hold off on purchasing electricity for the summer months, company officials said.
“We need to buy power for June,” said Bill Ridmann, vice president of rates and regulatory affairs for the Akron-based electric utility and parent firm of Toledo Edison.
In an interview Wednesday with The Blade’s editorial board, Mr. Ridmann said FirstEnergy has canceled two power auctions where wholesale suppliers bid to provide power to supplement FirstEnergy’s electric needs.
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The utility executive said the company will go back to hearings next Thursday with the Public Utilities Commission of Ohio. But it would be best for planning purposes for the commission to render a decision over the next three months, Mr. Ridmann added.
FirstEnergy first proposed its new Electric Security Plan in 2014 and it was modified last month.
Under the revised plan, a typical residential customer would pay about $3.25 more a month during the first year of the plan, which would lock in a market for FirstEnergy’s nuclear and coal power plants for eight years even if cheaper power is available elsewhere.
Company officials contend that the older plants will become more competitive as environmental regulations and other factors drive up power prices. But it wants customers to share the cost of that risk even if that scenario doesn’t come to pass.
“We think the plan is a fair balance between the company and our customers,” Mr. Ridmann said.
He said FirstEnergy has looked at the future of the electric industry “and we believe the market ahead is fraught with problems.”
Mandates for cleaner energy, a drop in oil prices, abundance of natural gas leading to fewer wells being dug, and rapidly changing technology may lead to a volatile energy market, Mr. Ridmann said.
Volatility could make the power produced by the 40-year-old Davis-Besse nuclear plant near Oak Harbor and the W.H. Sammis coal plant near Steubenville quite valuable in the future. “Sammis has the latest equipment. From an efficiency standpoint, it has a bright future,” Mr. Ridmann said.
But no one can say if that will be the case, he added.
The plan guarantees a market primarily for electricity generated by Davis-Besse and the Sammis plant. Without the guarantees the utility says the plants could be “at risk” of closing. The plan also calls for power to be bought from the Ohio Valley Electric Corp. units in Gallipolis, Ohio, and Madison, Ind., in which FirstEnergy is part owner.
FirstEnergy’s plan has been recommended for approval by the PUCO staff, but there are many critics.
Critics, including the Ohio Consumers’ Counsel, contend the deal is bad for consumers and the environment. The consumers’ counsel estimates the plan would cost consumers $3.9 billion over the eight years.
FirstEnergy says a residential customer using 750 kilowatt hours of electricity a month would pay $3.25 more per month during the first full year of the plan.
But it predicts that will decrease going forward, and eventually, its customers collectively will save $560 million over the eight years if retail power prices increase. There would be no such savings, however, if power prices do not increase.
Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.
First Published January 7, 2016, 5:00 a.m.
