American Electric Power’s (NYSE:AEP) AEP Ohio on Sept. 27 said that it has filed a proposal with the Public Utilities Commission of Ohio to support the development of 400 MW of new generation resources in Ohio by purchasing renewable power for AEP Ohio customers.
The 300-MW and 100-MW facilities would be built in Ohio’s Appalachian region in Highland County, the company said. The 300-MW Highland Solar and 100-MW Willowbrook Solar projects were chosen following a competitive request for proposal process, the company said, noting that the projects are being developed and will be owned by Hecate Energy Highland LLC and Willowbrook Solar LLC, respectively. Both projects are expected to be operational by the end of 2021, pending regulatory approvals, the company said.
AEP Ohio said that it has secured two 20-year renewable energy purchase agreements (REPAs) for the power produced at those facilities. All AEP Ohio customers would share in the benefits of the new renewable generation resources, the company said, noting that residential customers using 1,000 kWh of electricity would see a 28 cent-per-month increase in their electric bills.
AEP Ohio noted that it committed to pursuing 900 MW of renewable generation resources, built in Ohio, in a 2016 agreement approved by the commission and a diverse group of stakeholders. The company said that that commitment was supported with the commission’s approval of AEP Ohio’s Electric Security Plan earlier this year.
The commission must evaluate the proposal and issue a decision before construction can begin, the company said.
According to the application, the company seeks an order approving the inclusion of the two solar energy resources totaling 400 MW of nameplate capacity solar energy in the company’s Renewable Generation Rider (RGR), as well as the creation of a new Green Power Tariff (Green Tariff) under which customers may purchase renewable energy certificates (RECs) for the solar energy resources’ environmental attributes.
The facilities would be operated on AEP Ohio’s behalf, and AEP Ohio would be responsible for operating the resources’ dispatch in the PJM Interconnection markets. The company added that it also requests that the commission find that it is reasonable and prudent for the company to enter into the Highland Solar and Willowbrook Solar REPAs.
“Including the long-term, fixed, non-escalating price REPAs in the rider is projected to save customers approximately $218 million compared to market over the REPAs’ 20-year terms,” AEP Ohio said in its application. “As the market price of energy in PJM fluctuates over time, the fixed-price REPAs also will act as a hedge against energy price volatility and provide stability and certainty relative to a portion of AEP Ohio customers’ energy costs.”
Of the proposed Green Tariff, the company said that it enables customers to support the development of in-state renewable energy resources by giving them the option to purchase green power that reflects some, all, or more than all of their load. Customers’ participation in the Green Tariff would produce revenues that would offset a portion of the net cost of the Highland Solar and Willowbrook Solar REPAs – i.e., the net cost after liquidating the output of the facilities into the PJM markets, the company said.
AEP Ohio also noted that all costs in the RGR would be subject to an annual audit for prudency. The RGR’s rate design would be uniform per-kWh charge or credit for all monthly consumption up to 833,000 kWh per customer account for the life of each project included in the rider, the company said. AEP Ohio said that it may propose that some or all of the output from a project included in the RGR be purchased through a bilateral contract with a retail customer, conditioned upon the commission’s approval.
Among other things, the company requested that a procedural conference be scheduled for Nov. 20 at the commission’s offices, followed by an evidentiary hearing to begin on Nov. 28 at the commission’s offices.