Two of the utility companies that own the Ohio Valley Electric Corp. (OVEC) want to keep the public from learning about how OVEC’s two money-losing coal plants are allowed to operate at will and send expensive electricity to the grid because of Ohio’s scandal-plagued HB 6 law.
Ohio Power, also known as AEP Ohio, and Dayton Power and Light filed motions with the Public Utilities Commission of Ohio on Jan. 17 opposing attempts to obtain more details about OVEC’s operations. Those questions include the amount of money the companies earned in 2020 in payments mandated by HB 6, their returns on investments from OVEC and communications related to whether the OVEC plants should operate on a “must-run” basis.
Wednesday’s filings represent another attempt by the utilities that own OVEC, also called the “sponsoring companies,” to keep secret details in the ongoing audit of the effects of HB 6 conducted by London Economics International (LEI). That audit has already concluded that OVEC’s plants lost money by self-committing electricity to the grid.
Those attempts, as Checks & Balances Project has reported, have included claims that information that was available to the public was somehow a trade secret that needed to be hidden from the public version of the LEI audit.
Unraveling claims of secrecy
When the LEI audit was completed in December 2021, the sponsoring companies sought a protective order that redacted multiple pieces of financial information from the audit. They claimed the data were trade secrets whose disclosure would damage OVEC’s competitiveness.
Staff members of the Public Utilities Commission of Ohio (PUCO) agreed to the protective order, and neither the Ohio Consumers’ Counsel nor industry groups opposed the utilities’ motions.
Redacted from the LEI audit were the names of the companies that supplied overpriced coal to OVEC, the prices OVEC paid for the coal and OVEC’s net income. Despite the utilities’ claims that this information was a trade secret, they utilities themselves had provided the information to the U.S. Energy Information Administration and on OVEC’s website.
However, analysts representing electricity consumers filed testimony with PUCO in October that cited the public information and revealed how much one of OVEC’s coal suppliers, Resource Fuels of Columbus, was charging OVEC for coal. In 2020, Resource Fuels made $12.6 million more for the coal it sold OVEC than another company that was supplying OVEC with more coal from the same mine.
C&BP reported those details in November and subsequent reporting has highlighted the utilities’ misleading claims of trade secrecy.
Last month, PUCO agreed that many of the details should be part of the publicly available version of the LEI audit. Earlier this month, Ohio Power acknowledged that many details covered by the protective order were not trade secrets and should be disclosed. That included the information revealed by C&BP’s reporting.
Must-run strategy props up OVEC’s money-losing plants
Power plants operate and supply electricity to the grid on either a “must-run” or “economic” basis. Must-run plants operate continuously and commit their electricity to the grid operator, which in Ohio is the PJM system. Economic plants send their electricity to the grid at the request of the grid operator.
The company has argued that it can’t turn its plants on and off at will and that they must run continuously to operate efficiently. But multiple reports from analysts and grid operators have shown it’s wasteful to allow coal-fired plants to run at will and commit their electricity to the grid on their own.
LEI’s audit also showed that in 2020 OVEC was often losing money on the electricity it self-committed to PJM: “LEI’s analysis (based on monthly average PJM prices) shows that some of the time, the PJM energy price did not cover fuel and variable costs.”
During 2020, OVEC ran some of its plants as “economic,” which LEI approved. LEI said OVEC should continue to run its plants that way in the future.
Many of the questions OVEC’s owners don’t want to answer involve OVEC’s self-commitment and must-run practices.
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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