Dive Brief:

• Independent power producers have asked the Federal Energy Regulatory Commission (FERC) to void power purchase agreements allowing two Ohio utilities to continue operating aging power plants through proposed regulatory agreements that would guarantee income from the struggling facilities, RTO Insider reports.
• Generators Dynegy and NRG Energy appealed to FERC to rescind a waiver allowing the American Electric Power (AEP) and FirstEnergy to engage in affiliate power transactions, calling their current proposals "a clever scheme to shift costs."
• PJM Interconnection, the region's grid operator, has also filed an amicus brief with the Public Utilities Commission of Ohio, saying claims that the older Ohio facilities are necessary for reliability have been overblown.

Dive Insight:

Proposals to guarantee income to aging coal and nuclear plants in Ohio being are now facing an even wider range of critics calling for further scrutiny.

A hearing wrapped up last month to consider a settlement allowing FirstEnergy to keep two power plants operating: the Davis-Besse Nuclear Power Station in Oak Harbor and the W.H. Sammis coal-fired plant in Stratton. While consumers would pay more up front, FirstEnergy believes they save hundreds of millions over the length of the deal while the plants stay open. Hearings on the proposal concluded last month.

AEP is pushing a similar deal and reached a settlement covering four of its older coal-fired power plants. The Sierra Club also signed on to the settlement, which calls for development of 900 MW of renewable energy. Regulatory staff recieved post-hearing briefs from involved parties on Monday and the decision now rests with the commissioners. 

Nuclear generator Exelon said last month it believed it could sell 3,000 MW of carbon-free generation into the state –$2 billion cheaper than FirstEnergy's proposal — despite not owning any instate generation resources. 

Dynegy said “At the proposed rates, Dynegy could replace the plants being subsidized under the FirstEnergy and AEP PPAs by building 6,300 MW of new, clean natural gas powered generation in Ohio,” the generator said in a statement.

And now Dynegy, NRG and other generators have asked FERC to step in to stop the deal.

In similar filings, the generators said that even though Ohio regulators may approve "a clever scheme to shift costs of this abusive affiliate contract onto consumers," FERC still has a "statutory duty to protect consumers from the effects of unjust and unreasonable wholesale rates or in any way make it less critical to ensure the integrity of the PJM markets."

The generators' complaint against AEP can be found here; the FirstEnergy complaint is here.

As to claims the Ohio generation is necessary to PJM reliability, the grid operator told PUCO that is not the case.

"Indeed, the Commission and Ohio consumers can be fully assured that the system is reliable in Ohio and the PJM region," the operator said. "Arguments that approval of the stipulation is needed to ensure reliability in Ohio are wide of the mark and represent a proverbial ‘red herring.'"