PUCO Approves Utility Rate Hikes to Subsidize Aging Power Plants

Mar 31, 2016

The W.H. Sammis plant is FirstEnergy's largest coal-fired plant in Ohio. The PUCO approved ratepayer subsidies to support it and the Davis-Besse nuclear plant over the next eight years.

Ohio regulators have approved a pair of deals that allow utilities FirstEnergy and AEP to impose multi-billion-dollar rate increases on electricity customers to subsidize older coal-fired and nuclear power plants.  

The Public Utilities Commission of Ohio unanimously passed the power purchase agreements 5- 0, which the companies say have clear benefits to the companies and to consumers.

PUCO chair Andre Porter noted the plans had been amended to stabilize customer bill rates and limit potential impact.

“The commission opinion and order today modifies those stipulations to ensure that the end result is in the best interest of all Ohioans.”

The PUCO, in a 5-0 decision, approved rate hikes for FirstEnergy and AEP customers to subsidize aging power plants.

Opponents are likely to challenge the decisions. The Ohio Consumers’ Counsel had estimated the rate hikes could add up to to $5.9 billion over eight years. It’s unclear what the total will be under the commissions’ changes to the plans.

The PUCO says the rate hike plans were changed to stabilize customer bill rates and limit potential impact. But critics such as Trish Demeter with the Ohio Environmental Council are angry.

“The PUCO’s decision means that we’re going to have at least 8 more years of harmful air pollution and Ohioans are going to have to pick up the tab for old, dirty coal plants that should be on their way to retirement.”

Opponents also include Trey Addison with AARP.

“Any cost to the consumer from businesses that essentially are consistently profiting, at the end of the day for us: What about Suzie Buckeye who’s on a fixed income and frankly, cannot afford any sort of increase? That’s our main issue.”

FirstEnergy and AEP said the rate hikes were needed to guarantee income for struggling coal and nuclear plants and would bring stability to the marketplace.