By Rory D. Sweeney
PJM and the Retail Energy Supply Association want a say in Dayton Power and Light’s plan to keep its coal-fired plants running.
Both organizations have filed motions to intervene in DP&L’s “electric security plan” application before the Public Utilities Commission of Ohio. If their past actions are any indication, they will voice objection to the plan, much as they did in similar cases involving FirstEnergy and American Electric Power, which are Ohio’s two largest electric utilities. (See PJM Looking at AEP, FirstEnergy PPAs; Critics Join Forces.)
DP&L’s application proposes a 10-year reliable electricity rider (RER), which would help parent company AES continue operating its fleet of coal-fired plants. Under the rider, DP&L would agree to acquire generation from the shares another AES subsidiary owns in the Ohio Valley Electric Corp. and the Conesville, Killen, Miami Fort, Stuart and Zimmer plants — all baseload coal-fired facilities DP&L used to own but was required to sell under its current ESP.
The rider would further stipulate that the difference between the revenue requirements of each plant and its expected revenue would be calculated annually. Depending on the outcome of the calculation, customers would receive a credit or a charge.
In announcing the application, DP&L estimated that, if approved, the first year of the rider in 2017 would result in an additional $1.21 charged to each monthly bill but “contribute an estimated $26.5 billion in positive economic benefits for Ohio.”
In their filings, PJM and RESA said approval of the plan would have market-wide impacts.
“The commission’s decision in this matter will affect the viability of the competitive retail electric market in DP&L’s service territory,” RESA said in its filing.
“The nature and extent of PJM’s interest is to ensure DP&L’s RER proposal will not negatively impact PJM’s ability to administer efficient and competitive wholesale energy, ancillary service and capacity markets, and maintain the reliability of the transmission system in the PJM region,” PJM’s filing stated.
DP&L’s plan has drawn criticism from environmental groups, including the Ohio Environmental Council and the Environmental Defense Fund. Both groups are also contesting similar proposals from FirstEnergy and AEP.
The companies are “cherry-picking some of their worst plants, and they’ll put those in a package and they’ll say that the state of Ohio needs these for jobs and economic development,” said John Finnigan, a lead attorney with EDF.
“It’s a subsidy for these plants. These plants are out of the money.”
Under its current ESP, DP&L was required to divest its generating assets. AES decided in 2014 to retain the Dayton-area power plants, which were nearly 3,500 MW at the time. The generation was sold to another AES subsidiary, AES Ohio Generation.
Both AES Ohio and DP&L are overseen by DPL, another AES subsidiary. Today, DPL serves (through DP&L) approximately 515,000 customers in 24 counties throughout West Central Ohio and operates (through AES Ohio) 3,066 MW of generation, 2,078 MW of which is coal-fired.
DP&L said it was reviewing the petitions to intervene. “Once a thorough review is complete, we will explore all options for our next steps,” said spokeswoman Mary Ann Kabel.