Dive Brief:

• Large energy consumers in Ohio are opposed to American Electric Power's plan to guarantee income for its coal and nuclear generation, arguing the arrangement is not appropriate in the state's deregulated market.
• Kroger, WalMart and a group of industrial consumers have opposed the plan, which they say would shift the plants' financial risk over to consumers.
• The proposal is similar to FirstEnergy's plan for its coal and nuclear generation, as well as another by AEP that Ohio regulators found legal, but not in the best interest of the state's consumers.

Dive Insight:

Large energy consumers in Ohio remain opposed to plans by the state's utilities to guarantee income for aging power plants, Columbus Business First reports, staying consistent with the positions they took in an earlier proposal from AEP and an ongoing bid from FirstEnergy.

Due to low-cost gas and wind power, the plants are no longer profitable in the state's deregulated markets and the utilities say income guarantees are necessary for them to remain open. The utility companies argue that the plants are essential for reliability and that they will protect consumers from expected rises they expect in natural gas prices.

PJM Interconnection is opposed as well. "AEP has not demonstrated and cannot demonstrate why customers should bear these costs and take these risks, if a well-informed generation owner is not willing to do so," PJM's Joseph Bowring, who leads the grid operator's market monitoring division, told PUCO in filed testimony.

Earlier this year, the Ohio Public Utilities Commission rejected AEP's plan to guarantee income for two aging coal plants. In the ruling, the regulators found AEP's proposal to be legal, but not in the best interest of consumers, allowing it and FirstEnergy to move forward with separate subsidy bids.

FirstEnergy proposed securing all supply needed for its standard service offer for Ohio Edison, Toledo Edison and The Cleveland Electric Illuminating companies through a competitive bidding process. State regulators have developed a web page explaining that FirstEnergy proposes to conduct six auctions over a three-year period for products of one to three years in length.