Ohio's electrical rate deal approved last week by the Public Utilities Commission of Ohio (PUCO) provides for rate stability that will “keep a diverse set of fuel sources available to generate electricity, rather than risking more plant closures,” FirstEnergy Corp. said.
The deal approved Thursday is an eight-year Purchased Power Agreement covering production at the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio, the W.H. Sammis Plant in Stratton, Ohio, and a portion of Ohio Valley Electric Corporation units in Gallipolis, Ohio and Madison, Ind., FirstEnergy said.
The pricing formula starts with Ohio Edison, Toledo Edison and the Illuminating Company purchasing power from the Davis-Besse and W.H. Sammis plants at the cost of production plus 10.38 percent. The electricity would then be sold on the wholesale market, after which FirstEnergy customers would pay the difference between that electricity and electricity produced by gas-fired plants, which is cheaper, according to Ohio.com.
FirstEnergy said the plan's strength lies in price stabilization that would be a hedge for customers against rising energy prices in future years.
The plan also reinstates energy efficiency programs and includes a goal to reduce carbon dioxide emissions by at least 90 percent below 2005 levels b 2045.
FirstEnergy President and Chief Executive Officer Charles Jones said the plan would help “to preserve vital baseload power plants that serve Ohio customers.” The plan covered the interests of “a broad array of stakeholders,” Jones said.
FirstEnergy said it would expect to file new rates with the PUCO by May 2, following the completion of a competitive auction process to buy electric generation supply for their non-shopping customers. The expectation, the company said, is that the “vast majority” of its customers would see their total electricity bills drop after these auctions. FirstEnergy has 1.9 million residential customers affected by the plan.
FirstEnergy had said that its residential customers would see a slight uptick in their bills for the first 31 months of the so-called electric security plan. After that, bills would go down, the company said.
The plant and jobs-preserving plan had support from local governments, but was criticized by the Ohio Consumers' Counsel, that said it would cost customers $3.9 billion over the next eight years, although PUCO made late changes in the deal that would favor customers, according to media reports.
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