Electricity customers paid $10 billion in excess electricity costs between 2016 and 2022 because utilities sent expensive coal-generated power to the grid and crowded out cheaper alternatives, a new report released Tuesday shows.

These higher costs, consulting firm RMI reported, meant that some electricity customers sacrificed other essentials to pay for power.

“One way we can help decrease customer energy bills for many families is to refrain from running coal plants when lower-cost resources are available,” RMI said.

When grid operators buy electricity for their markets, they look first to the lowest-cost providers. But self-committing electricity allows utilities to jump ahead of the line and send their coal-fired power into the grid ahead of cheaper sources.

Money-losing OVEC plants self-commit their electricity

The two coal-fired power plants owned by Ohio Valley Electric Co. are prime examples of self-committing power. Although multiple analyses have concluded the plants lose money, they continue to send their electricity to the grid automatically and are reimbursed for their higher fuel costs by ratepayers.

Ohio’s HB 6 law forces ratepayers to subsidize the money-losing OVEC plants. Checks & Balances Project has reported that some utility executives urged their companies to stop self-committing their electricity because the plants were losing money.

John Swez, Duke Energy’s director of generation dispatch, told his colleagues in an email that Duke should propose to the OVEC board that the company start running its power plants on an “economic” instead of a “must-run” basis.

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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