Latest audit on Dayton’s coal buying due to be filed in Ohio by Sept. 4

An attorney examiner at the Public Utilities Commission of Ohio issued a May 6 order that said that consulting firm Energy Ventures Analysis (EVA) needs to deliver a draft version of its latest fuel cost audit for Dayton Power and Light by Sept. 4.

The drat report has initially been due by June 5 of this year. “To afford EVA additional time to complete the audit, the attorney examiner now finds that the deadline for EVA to file the draft and final audit reports should be extended by a period of approximately 90 days,” said the order. “Accordingly, the attorney examiner directs EVA to submit its draft audit report to Staff and DP&L by September 4, 2015, and the final audit report to the Commission by October 2, 2015.”

EVA has done prior audits of Dayton’s fuel buying that have featured criticism of the utility’s coal optimization program. The optimization program scored mostly wins, but also a couple of losses, in an August 2014 decision from the Public Utilities Commission of Ohio in a prior fuel review case that featured an audit written by EVA. Under the coal optimization program, the PUCO has allowed Dayton to buy and sell coal positions, if it thinks it can make money on those trades, on a daily basis. Any profits from those trades need to be shared with ratepayers.

The commission found in its August 2014 decision that DP&L’s choice not to exercise a 2010 option contract to purchase high-sulfur coal, for delivery in 2012, was prudent because it was out of the money. The commission also found that DP&L’s decision to purchase low-sulfur coal in 2010, for delivery in 2012, was prudent because DP&L did not know, and could not reasonably have known, that it would not need the low-sulfur coal in 2012. Therefore, Optimizations 2012-B, 2012-C, 2012-D, and 2012-1 should be allowed.

The commission found that Optimizations 2012-A, 2012-H, and 2012-1 should be allowed because a 2011 stipulation precludes the parties from challenging the optimizations based on general views that alternative ratemaking structures, alternative contracting approaches taken prior to April 29, 2011, or alternative hedging strategies, could have resulted in a more favorable end-result for customers.

The commission found that Optimizations 2012-J and 2012-K should be disallowed because they did not meet the requirements of proper optimization transactions.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.