Michigan regulators have disallowed $1,025,628 in excess charges for electricity from the coal-fired power plants owned by the Ohio Valley Electric Corp., a dramatic contrast with Ohio regulators paralyzed by the corrupt HB 6 law.
On April 11, the Michigan Public Service Commission disallowed the costs Indiana & Michigan Power (I&M) sought to recover for power they bought from OVEC, which provides electricity to I&M through an intercompany power agreement.
Michigan’s moves comes as the Public Utilities Commission of Ohio continues to drag along its audits of OVEC costs, which started almost three years ago. That audit by London Economics Inc. and filings by consumer groups and industry have shown that OVEC’s plants continue to lose money and paid too much for coal.
Fallout from the corruption of HB 6 continues. On April 9, former PUCO chairman Sam Randazzo was found dead from an apparent suicide in a Columbus warehouse he owned. Randazzo was indicted by federal prosecutors in December and by the state of Ohio in February.
Former PUCO chairman Sam Randazzo
Randazzo was part of the $61 million scheme created by officials of FirstEnergy Corp. and former Ohio House speaker Larry Householder to put Householder and his allies back in power, pass HB 6 and bail out FirstEnergy’s failing investments. Randazzo, appointed by newly elected Gov. Mike DeWine in 2019, helped write HB 6 while ostensibly serving as Ohio’s neutral energy regulator.
HB 6 requires Ohio ratepayers to subsidize the money-losing OVEC plants, which continue to run at will and their electricity to the grid. Michigan, however, is not bound by HB 6.
Michigan and OVEC
OVEC is owned by a group of utilities that together are known as the sponsoring companies. One in American Electric Power (AEP), the parent company of Indiana Michigan Power, which serves electricity consumers in southwestern Michigan.
This connection gives the Michigan PSC jurisdiction over OVEC’s operations. Michigan regulators ruled that I&M’s agreement with OVEC was “uneconomic and with excessive costs.”
Previous Michigan PSC decisions had shown that the state’s regulators were losing patience with OVEC and its expensive electricity. The PSC previously issued warnings to I&M and OVEC that it was “unlikely to allow I&M to recover unjustified costs from Michigan ratepayers.”
PUCO willing to accept utility claims
Since November, C&BP has detailed the PUCO’s willingness to tolerate the high costs of OVEC’s electricityand claims by OVEC and the sponsoring companies that their finances needed to be hidden from the public.
The sponsoring companies also falsely claimed that certain details were trade secrets, even though the information was already publicly available. These details included the names of the companies providing coal to the OVEC, the cost of that coal and OVEC’s annual report.
The PUCO eventually ruled that these details needed to be made public.
Ray Locker is the executive director for Checks & Balances Project, an investigative watchdog blog holding government officials, lobbyists, and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.
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