Editor’s Note — This is a week one recap of the AEP Ohio solar farm hearings.
At the first week of an evidentiary hearing at the Public Utilities Commission of Ohio (PUCO) offices, expert witnesses provided compelling testimony in support of the largest clean energy project in Ohio’s history. The case will determine if American Electric Power (AEP) Ohio’s application to prove the need to build at least 900MW of Ohio renewable energy projects, which include 400 MW of solar powered generation to be located in Highland County, will be approved.
In addition to AEP Ohio, expert testimony was provided by the Sierra Club, Natural Resources Defense Council (NRDC) and Ohio Partners for Affordable Energy (OPAE), with the Mid-Atlantic Renewable Energy Coalition set to testify in support later this week. These experts explained in detail the benefits that would be brought to Appalachian Ohio and AEP’s electricity customers.
Opponents to AEP’s plan were also expected to make their case this week, starting Wednesday. PUCO commissioners will make the ultimate decision and determine renewable energy’s role in Ohio’s energy future after all testimony concludes.
AEP Ohio’s experts kicked off the hearing by providing an overview of the renewable energy projects and made the case for the need in Ohio. These experts noted that large corporations now have aggressive renewable energy procurement goals, driven by both the environmental benefits as well as the economic savings and fuel price risk hedging benefits of renewable energy.
They also explained how, for years, the Ohio has failed to produce enough electricity within the state to meet usage requirements. The gap between supply and demand inside Ohio continues to widen and with recent retirement announcements from other Ohio utilities, more coal and nuclear plants will shut down and this gap will become even larger. Ohio currently depends on energy produced in other states to be brought in to meet the needs of its people, businesses and industry. This results in energy dollars from Ohio customers being exported to generators outside of Ohio and providing economic development benefits to residents and businesses in other states.
Expert witnesses from Navigant Consulting testified on behalf of AEP Ohio and shared that utility customers are expecting and, in some cases, demanding cleaner, renewable energy, and have a preference that renewables be generated in Ohio. Navigant’s independent survey titled “AEP Ohio Voice of the Customer: Attitudes and Expectations for Renewable Energy” shows:
* A combined 86 percent of residential and 73 percent of small commercial and industrial (C&I) customers think AEP making greater use of renewable energy above what it already does is moderately important to very important.
* An average of 74 percent of residential and 62 percent small commercial and industrial customers said they would be willing to pay more than they currently do to increase the use of renewables.
These results indicate that a strong majority of customers believe it is important that AEP Ohio makes greater use of renewable energy above current levels. The survey also revealed that a majority of residential customers and many small C&I customers are willing to pay some additional amount on their electricity bills for AEP Ohio investments in renewable energy. All of the factors examined by Navigant indicate that AEP Ohio customers are planning for, and expecting to be served by, more renewable generation to supply their energy needs going forward.
As attorneys for the opposing interests cross-examined AEP Ohio’s witnesses, one reality became particularly clear: More investment in Ohio renewable generation facilities are needed, and these solar projects provide the catalyst for a good start. This case is a story about how to encourage more renewables in the state, not a story about how to replace current development strategies. It became clear throughout that week that not all customers are able to take advantage of offers from Certified Retail Suppliers and those suppliers are not offering the all-Ohio renewable product that AEP’s customers are asking for and demanding. Utility-scale solar does not discriminate among customers and is the only way to build, finance and pass the clean energy benefits of utility-scale solar onto customers.
Sierra Club expert Michael Goggin explained that the wholesale markets operated by PJM, the regional grid operator, do not support adequate renewable energy development because of flaws in the market design that disadvantage renewable generation. Therefore, PUCO action to support renewable development is warranted. Goggin stated that many Ohio customers who want renewable energy may not have the appropriate credit rating, experience or access to capital to develop renewable energy projects on their own or to enter into longterm contracts to support renewable development. According to Goggin, AEP Ohio can utilize economies of scale, low-cost financing, and development expertise that most customers cannot access at this time. He also explained that if Ohio develops large-scale renewable projects, such as those proposed in this proceeding, energy prices will decline because renewables have low costs of operation and will displace higher-cost sources.
NRDC witness Gabrielle Stebbins explained the benefits of creating local economic development and jobs, increasing Ohio’s competitiveness, diversifying Ohio’s energy supply and improving public health. Stebbins discussed the overwhelming amount of support for these projects, which is starkly in contrast to recent bailout attempts for legacy fossil fuel plants in the state.
Dave Rinebolt testified on behalf of OPAE and shared the beneficial impact the proposed projects will have on residential electricity customers and the regional economy, including as many as 4,000 full-time equivalent jobs during the construction phase and approximately 150 longterm jobs in the solar manufacturing sector. The projects will produce additional tax revenues in the region and across the state with annual operating impacts projected to exceed $33 million. Rinebolt noted that utility scale projects provide a competitive price point from which all customers may benefit.
Submitted by Julie Theado, Krile Communications.