Trent Dougherty, General Counsel, April 28, 2016
On Wednesday, the Federal Energy Regulatory Commission (FERC) blocked two Ohio utilities’ plans to bail out dirty coal plants by raising Ohioans’ electricity bills. FERC agreed with the OEC and our environmental, consumer and industry group partners that the bailouts potentially undermine federal protections for electricity customers.
FERC previously ruled in FirstEnergy and AEP’s favor. However, after the complaint by power generators, and strong opposition by OEC and other environmental and consumer groups, FERC reconsidered and decided the bailouts are problematic and deserve greater scrutiny.
While the decision is a bit esoteric and the fight far from over, the takeaway is quite simple: federal energy regulators see the bailouts as “involuntary” and “inappropriate” subsidies of aging coal plants thrust onto customers to protect the pocketbooks of shareholders. This is exactly what we have been saying, and what we will continue to say as this case moves forward.
Customers are protected, for the time being. The original electricity rate increase was planned to take effect on June 1. This will not happen given FERC’s ruling. AEP and FirstEnergy will have the opportunity to come back to FERC to demonstrate that a competitive process was used to determine the best deal for customers. Spoiler: The utilities CANNOT demonstrate that, because these deals are meant to protect shareholders not customers.