Dive Brief:

• The Public Utilities Commission of Ohio (PUCO) on Nov. 21 denied American Electric Power's request to impose a non-bypassable charge on all customers for the development of two new solar projects, totaling 400 MW, concluding the utility had not shown a need for the additional generation.
• The projects are not dead, however: AEP can sign contracts with individual buyers for the electricity, and they are eligible for financial backing through a renewable energy fund created by House Bill 6, which supported the state's nuclear generation.
• While advocates say they expect the Highland Solar and Willowbrook Solar facilities to continue construction, they also warn the PUCO decision creates uncertainty for the future of solar development in the Buckeye State.

Dive Insight:

The solar projects were not necessary to meet future demand, but were proposed for economic reasons as customers have been seeking more renewable energy, AEP Ohio spokesman Scott Blake told Utility Dive.

Development would support hundreds of jobs, and bring in tax revenue for local governments, he said.​

The utility filed in September 2018, to include the 300 MW Highland and 100 MW Willowbrook projects in the company's renewable generation rider. The utility had planned to enter into power purchase agreements for all of the output.

Blake said the utility can apply for rehearing, but is still considering its options. The projects have already been approved by the Ohio Power Siting Board, and so the utility could look to secure contracts with cities, corporations or other large buyers of the electricity. Development on the projects had already begun in order to qualify for federal Production Tax Credits.

The decision could be a setback for Ohio's renewable energy development, according to the Natural Resources Defense Council (NRDC). The group says PUCO's cost recovery rejection could create uncertainty for future projects and the supply chain manufacturing jobs that would be developed in the state.

"This decision is unfortunate but will not likely prevent these solar projects from being built," Daniel Sawmiller, NRDC's Ohio energy policy director, said in a statement. "Ohio urgently needs renewable energy developments like this project to be built. We can't be left behind while other states attract the economic opportunities and jobs of the clean energy economy."

Ohio regulators said their decision had nothing to do with solar energy, but instead focused on AEP's long-term forecast.

"Today's decision is not about any particular generating technology. Rather, it is about what must be demonstrated by an electric distribution utility before Ohio law might allow the PUCO to approve the proposed charge," PUCO Chairman Sam Randazzo said in a statement.

Randazzo also said that Ohio's customer choice laws mean AEP Ohio customers can still contract directly to purchase the solar facilities' output. And HB 6, signed into law in July, provided about $20 million a year to support multiple projects already approved by regulators.

The Ohio Consumers' Counsel called PUCO's rejection of the projects "a rare major victory."

"Renewable energy is a good thing, but the electricity from AEP's proposed solar plants is not needed and would not even be sold to Ohio consumers," the group said in a statement, adding that the state has plenty of renewable energy available through wholesale markets.

Ohio had about 230 MW of solar installed as of the second quarter of this year, according to the Solar Energy Industries Association.