NOTE: This is the third of three stories examining Ohio's environmental and energy future.
Ohio’s largest energy companies are trying to figure out what they’re going to do with their coal power plants as they navigate through a vital time in the utilities industry. Statehouse correspondent Andy Chow explores the different paths those utilities can take and what that means for Ohio residents.
Many agree that the state of Ohio has reached a boiling point where the fate of coal, renewable energy and the regulatory framework itself must be decided.
Businesses and energy companies think so. Business advocate Sam Randazzo says,“It’s not on a front page; it’s not something people will immediately understand, it’s geeky stuff.”
"Quite frankly I think we’re at a crossroads, " says Todd Snitchler with the Alliance for Energy Choice.
Environmentalists think so. According to Dan Sawmiller with the Sierra Club’s Ohio Chapter, “We’re at an incredibly critical transition point.”
And legislators think so, too. “We’re at a point where all of those major issues remain undecided," says state Sen. Bill Seitz of Cincinnati.
AEP and FirstEnergy had plans to keep their struggling coal plants afloat by adding an extra charge to customers’ electric bills. But that was essentially struck down by federal regulators. FirstEnergy is trying to find a new way to fund the plants, while AEP has suggested selling off all its coal plants or try to go back to a regulated industry.
A final blow to coal?
Dan Sawmiller with the Sierra Club says, whatever happens, the end of coal is near. “In terms of the final blow, you’ve sort of seen it; the market is sending a signal that coal is on its way out.”
Sawmiller supports a plan from AEP to develop a large solar farm that could create many jobs to replace the ones lost if coal plants shut down. His vision for Ohio’s energy future includes a whole new way of distributing power, which would lower electric bills.
“So instead of big plants that move power over long lines, we want smaller plants that are clean that deliver the power directly to the customer.”
An argument for true deregulation
Todd Snitchler of the Alliance for Energy Choice, a coalition of energy suppliers, argues that truly deregulating utilities would lower energy costs. Right now, AEP, FirstEnergy and Dayton Power and Light each have two companies; one side makes the power and the other sends it to homes and businesses. Although they’re two separate companies, they share the same shareholders and CEO’s.
“The easier thing to do might be to pull the Band-Aid the rest of the way off and force separation of generation from wires.”
Snitchler, the former head of utilities regulation in Ohio, says this will spur better competition and more investment among the suppliers.
Concerns from business
Meanwhile, a business advocate who’s been involved with utility regulation since the early '70s says there’s a much larger problem that needs to be addressed: volatility. Sam Randazzo says companies make huge investments in power plants in hopes of seeing a return in about 40 years, but the wholesale market can only forecast prices three years into the future.
“That tends to force people to make investments that may not be the best over the long haul but are rational if you’re only considering the three-year period.”
Also looming in Ohio are the green energy standards that require utilities to deliver a certain amount of renewable energy and the federal Clean Power Plan strives to reduce the amount of carbon emissions.
Action in Columbus
Republican Sen. Bill Seitz of Cincinnati opposes those standards, but says all these issues are so critical that he’s calling for a meeting of the minds, where the governor and other top energy leaders sit in a room and get on the same page.
There are so many possibilities for the future of energy in Ohio. Coal plants could begin to shut down or continue for another 15 years. Utilities could follow AEP’s lead and decide to invest more in solar and wind. And more independent energy producers could come into the state to increase competition.
And while experts can debate which options are the best, the only thing we know for sure is that any of these scenarios have the power to affect all the charges and fees that make up the bottom line on your monthly electric bill.