Two rulings issued March 31 by the Public Utilities Commission of Ohio (PUCO) are tantamount to bailouts for incumbent utilities American Electric Power (NYSE:AEP) and FirstEnergy (NYSE:FE), according to PJM Power Providers Group (P3) and the Electric Power Supply Association (EPSA).
The two competitive power organizations have previously filed comments with PUCO sharply critical of the power purchase agreement (PPA) packages approved by the Ohio commission March 31 for affiliates of AEP and FirstEnergy.
The decisions announced by PUCO provide for long-term power contracts for certain incumbent coal and nuclear plants operated by affiliates of one of the two Ohio-based companies. PUCO has noted that the agreements do include some cost controls and a commitment by AEP and FirstEnergy to “grid modernization” and more renewable energy.
“With today’s order, the PUCO punishes those that seek to bring innovation, competition and efficiency to the market,” said PJM Power Group President Glen Thomas.
“Rather than transitioning to the grid of the future, the PUCO has locked the consumers of Ohio into one of the largest handouts in the history of public utility regulation,” Thomas said in a joint news release with EPSA. Thomas called upon the Ohio General Assembly and Gov. John Kasich (R) to “stand tall and fight for Ohio’s energy future.”
“Today’s decision by the PUC of Ohio impermissibly attempts to regulate wholesale power markets and contracts between affiliates that are within the jurisdiction of the Federal Energy Regulatory Commission,” said EPSA President and CEO John Shelk.
“There is no disputing the overwhelming evidence in the PUCO dockets that the abusive contracts approved today will unnecessarily raise rates for consumers, shift risks from utility shareholders to consumers, and distort the multi-state wholesale market on which tens of millions of customers depend for their electricity,” Shelk asserted.