Exelon (NYSE:EXC) has told the Public Utilities Commission of Ohio (PUCO) that it can offer electric customers a long-term power plan that would cost less than what’s being proposed by FirstEnergy (NYSE:FE) subsidiaries and also rely on zero-emission generation.
The Exelon proposal, spelled out in Dec. 30 testimony filed with PUCO, is one of the side-plots of a case where FirstEnergy’s Toledo Edison, Ohio Edison and Cleveland Electric Illuminating (CEI) subsidiaries would contract for power from coal and nuclear capacity.
PUCO Case No. 14-1297-EL-SSO involves an application from FirstEnergy subsidiaries for authority to provide for a Standard Service Offer in the form of an Electric Security Plan. The proposal, like one from American Electric Power (NYSE:AEP) has sparked much debate before the Ohio commission.
Exelon Director of Regulatory and Government Affairs Lael Campbell filed written testimony in the PUCO case on Dec. 30.
“Specifically, I will show that a guaranteed eight year offer from Exelon Generation Co. for 100% emissions-free power that we make today will provide well over $2 billion in savings to Ohio families and businesses as compared to the grossly lopsided deal offered by FirstEnergy Ohio,” Campbell said.
Exelon will hold this offer open for 180 days and will bid into the competitive process at a price no greater than this offered price, Campbell said.
“To be clear, ExGen is not suggesting that the Commission should substitute the ExGen PPA [power purchase agreement] offer with the FirstEnergy PPA offer, although the Commission is free to do so if it so choses,” Campbell said. “Instead, if the Commission determines that Rider RRS is in the interest of Ohio electricity consumers, we urge the Commission to hold a competitive process and obtain a PPA to include in Rider RRS that provides the best value to Ohio customers.”
Exelon said a competitive process would be consistent with recent orders by PUCO that seem to endorse competitive processes to procure energy. “Competition will yield the best price,” said the Exelon official.
“A competitive process also will wash away the stain of this affiliate backroom deal where FirstEnergy has positioned its regulated utility to benefit its affiliate First Energy Solutions (FES) exclusively by coupling the proposed power purchase agreement with settlement “goodies” provided by the regulated utility,” Campbell said in the testimony.
Campbell went on to say that “Exelon does not oppose power purchase agreements; Exelon opposes the FE PPA and a process where a company’s regulated and un-regulated businesses craft a self-serving agreement that is not tested by competition.”
Exelon can offer electric power that is “100% carbon-free immediately,” Campbell said. Exelon is the nation’s largest nuclear power operator. Exelon is offering customers a carbon-free package of energy and capacity from nuclear, hydro, solar and wind assets, Campbell said.
While the FirstEnergy plan would include FirstEnergy’s 900-MW Davis Besse nuclear plant, most of the rest of the 3,000 MW of generation would come from coal plants, said the Exelon official.
“Exelon recognizes the value to Ohio of in-state nuclear plants like Davis Bessie to EPA compliance and the overall reduction of carbon emissions,” Campbell said in the testimony. Exelon’s preferred approach to preserve nuclear resources like Davis-Besse “is a market-based approach, such as a low carbon portfolio standard,” Campbell said.
The Exelon official also disputed the FirstEnergy assertion that the FirstEnergy offer will shield Ohio customers from capacity performance risk.