Synapse in the News: Synapse Finds Duke Energy Ohio’s Electric Security Plan Could Cost Consumers Millions
Synapse associate Sarah Jackson recently testified before the Public Utilities Commission of Ohio that the price stabilization rider (PSR) attached to Duke Energy Ohio’s proposed electric security plan could cost consumers millions through 2024.
Duke proposed the rider as a non-by passable charge through which the company would pass on to its customers the costs associated with its 9 percent ownership interest and contractual entitlement in the Ohio Valley Electric Corporation’s two aging coal-fired power plants. Customers would then be credited for any revenues earned from selling the OVEC generation into the PJM energy and capacity markets. Duke claims that over the life of the rider (which runs until 2040), a net benefit will accrue to customers, though it offered no evidence for this claim.
Ms. Jackson reviewed the PSR on behalf of Sierra Club and found that it could be adverse to state and public interests in several ways, including the fact that, based on the company’s own analysis, it will result in cumulative net costs to consumers through at least 2024. If the company’s predictions about future energy and capacity prices are wrong, or if costs of power from the OVEC assets increase significantly in the coming years as a result of environmental regulations, it is possible that Duke Energy Ohio’s customers will never see any financial benefits from the PSR.
The proceeding—with a focus on Ms. Jackson’s analysis—was a top headline in SNL Energy’s daily publications summary on December 19.
Darren Sweeney writes:
A consultant hired by the Sierra Club to analyze Duke Energy Ohio Inc.'s proposed electric security plan argues the price stabilization rider, or PSR, attached to the proposal will result in "net costs" and will not benefit the company's customers… Despite Jackson's analysis and objections from environmentalists and consumer advocates, as well as PUCO Staff's recommendation that the PSR be rejected, Duke Energy Ohio continues to tout its plan and price stabilization rider as beneficial to Ohio's customers and the competitive market.