By Christen Smith

Regulators in Ohio last week denied American Electric Power’s request to recover costs from ratepayers for proposed wind and solar projects totaling 900 MW, saying that PJM’s diverse resource mix already provides enough access to renewable generation.

The Public Utilities Commission of Ohio said in a ruling Thursday that “we are not persuaded that the energy or capacity markets have, in fact, failed, as AEP Ohio asserts” and instead suggested the utility seek state subsidies or solicit competitive bids for the projects.

“Today’s decision is not about any particular generating technology,” PUCO Chairman Sam Randazzo said. “Rather, it is about what must be demonstrated by an electric distribution utility before Ohio law might allow the PUCO to approve the proposed charge. Indeed, Ohio’s ‘customer choice’ framework provides AEP Ohio customers with the individual right to do directly what the proposal would have compelled all such customers to do regardless of their individual preferences.”

AEP last year asked for cost recovery under the state’s renewable generation rider (RGR) for 500 MW of wind and 400 MW of solar, arguing that the projects would fulfill a growing desire for clean energy, offset the price volatility in PJM associated with fossil fuels and enhance the state’s economy.

The proceeding was split into two parts, with PUCO first determining the need for the projects before settling on a cost-recovery mechanism. AEP stalled the ruling in September in order to update its arguments to reflect the impacts of the recently passed House Bill 6, which curtails the state’s current renewable portfolio standard and tacks on monthly fees — ranging from 80 cents for residential customers to $2,400 for large industrial plants — to electricity bills, mostly for FirstEnergy Solutions’ Davis-Besse and Perry nuclear facilities. Some $20 million of the fees collected will support six solar power projects, including AEP’s proposals, in rural areas of the state. (See Ohio Approves Nuke Subsidy.)

Protesters — including the Ohio Consumers’ Counsel, Kroger, Ohio Coal Association, Direct Energy, IGS and IGS Solar — urged the commission to rule in the case anyway, calling the bill irrelevant to “the statutory issue of whether Ohio utility consumers need electricity from the proposed solar plants.” The companies further alleged that AEP didn’t need a second revenue stream on top of the money afforded to the projects via HB 6. (See PUCO Delays Ruling on AEP Solar Projects.)

“We note that our conclusion on the question of need is not intended to address the merits of the Willowbrook or Highland [solar] projects, which may provide significant benefits to the region,” the commission wrote. “Nothing in our decision today precludes AEP Ohio (or its affiliates) from investing in the Willowbrook or Highland projects and pursuing the projects’ claimed social and economic benefits through means other than a nonbypassable surcharge.”