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Duke Energy Ohio Electric Security Plan Case

Client:

Duke Energy Ohio filed an application before the Public Utility Commission of Ohio seeking approval of an electric security plan (ESP), which included a request for approval of what the company calls a “Price Stabilization Rider” (PSR). Duke proposed this 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.

Synapse was retained by Sierra Club to review the company’s application, supporting testimony, workpapers, and discovery in the proceeding, focusing on the proposed PSR. Synapse found that the PSR 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 Commission agreed with Synapse and with intervenors who shared this concern, and rejected the PSR on the grounds that the rider, as proposed, would not benefit ratepayers

Status: 
Project completed November 2014.