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Past and future electric rate plans up before PUCO, Ohio high court

BY: JIM PROVANCE |

Just as state regulators are about to set electricity rates in much of northern Ohio for the next eight years, the Ohio Supreme Court on Wednesday delved into whether they followed their own rules for the rate plan that’s about to expire.

During arguments before the high court about the past, both justices and attorneys were looking to the future.

The Public Utilities Commission of Ohio will resume hearings next week into a proposed rate plan from Toledo Edison’s Akron parent, FirstEnergy Corp., that would lock in a market for its subsidiary’s aging coal-fired and nuclear power plants regardless if the electricity they generate would be the cheapest option.

Both sides agreed, however, that refunds for customers are not an option under the current plan, even if the high court should rule against the PUCO and the utility.

“What we’re looking for is a ruling that this can’t happen again in the future,” said Madeline Fleisher, attorney for the Environmental Law and Policy Center. “This issue will come up again if you don’t deal with it.”

The center and the Northeast Ohio Public Energy Council, a consumer aggregator serving the Cleveland area, argued that the commission failed to spell out why each of the conditions in FirstEnergy’s current Electric Security Plan was better for consumers than if the utility had to buy electricity on the open market.

That’s also a key issue in the case before the PUCO, as consumer advocates, environmental organizations, and competing electricity suppliers argue that the Davis-Besse nuclear plant near Oak Harbor and the W.H. Sammons coal-fired plant near Steubenville cannot compete economically with cheaper sources such as natural gas.

They claim the plan would cost consumers billions while FirstEnergy maintains it would save money over time.

PUCO attorney Tom W. McNamee argued that the rate plan now in place was essentially an extension of the plan that expired in 2012. The follow-up phased in higher generation costs that FirstEnergy claimed were caused by new federal clean air regulations that led to the closing of some coal-fired plants. The extension was to ease the cost increase on consumers, he said.

“It’s a great benefit to the public, frankly, to be able to do that,” Mr. McNamee said. That cost has since fallen.

The high court did not immediate rule, and it’s unclear whether a decision would come in time to affect the PUCO’s deliberations on the latest proposal affecting rates for the next eight years. The current plan expires May 31.