Dive Brief:
- American Electric Power has asked Ohio to reconsider power purchase agreements approved in March, scaling back its request for income guarantees at nine units and leaving only about 400 MW of contracted capacity on the table, Columbus Business First reports.
- The Public Utilities Commission of Ohio (PUCO) in March approved subsidies for a swath of generation owned by AEP and FirstEnergy, but after federal regulators nixed that idea, both companies have headed back to the drawing board.
- Most observers expect the Federal Energy Regulatory Commission's rejection of the deals to have a greater impact on FirstEnergy. The companies have looked to re-regulation of Ohio's competitive energy markets, but a former PUCO head said that plan would be like trying to put "toothpaste back in the proverbial tube."
Dive Insight:
When environmental advocates challenged power purchase agreements this week, notably absent from the objections was AEP's proposal. The company has scaled back its plan, and now seeks to cover just 423 MW, its contractual share of generation from Ohio Valley Electric Corp. Comparatively, PUCO in March approved income guarantees for an additional 2,671 MW from nine AEP generating units — Unit 1 at the Cardinal coal plant, Units 4-6 at the Conesville plant, Units 1-4 at the Stuart plant and Unit 1 at Zimmer.
"The company is productively attempting to salvage rather than terminate the commitments made as part of the beneficial package of the stipulation in a reasonable and modest way," AEP's lawyers said in the Monday filing. Columbus Business First reports the utility requested other changes as well.
AEP is looking to sell generation not covered by Ohio's agreements, and so far it is unclear if FERC's denial of the deals will add the additional nine units to the auction block. AEP CEO Nick Akins confirmed three weeks ago that his company's Midwest generation fleet is up for sale, and that information on the plants has been disseminated to potential bidders.
Re-regulating Ohio's power markets is an idea which has been floated, and Ohio Sen. Bill Seitz (R) introduced a bill which mirrors a proposal floated by AEP last year to pressure net metering customers to select the utility for its generation source. But critics say re-regulating the market would be a high hurdle to clear.
"I would like to say with certainty that that boat has sailed," former PUCO chairman Todd Snitchler told Platts. "It would be a significant challenge to put the toothpaste back in the proverbial tube, so to speak."
