Cameron From: Cameron Sent: Tuesday, July 25, 2017 9:54 AM To: 'Janice Tinkham' Subject: RE: NO to Ohioans should not have to pay for Ohio Valley Electric Corporation's bad business decisions. Good Morning Ms. Tinkham, Thank you for reaching out to Representative Smith regarding HB 239 and SB 155. He always-appreciates hearing from constituents on pending legislation and matters of public policy. 1 have passed along your message to Representative Smith for his review. HB 239 is currently pending before House Public Utilities Committee and discussions on the bill will resume once the House is back in session in September. Please do not hesitate to reach out to our office again in the future regarding this or any other legislation or if we can be of any assistance. Best, Cameron J. Legislative Aide Office of State Representative Ryan Smith 77 S. High St. Columbus, OH 42315 (614) 466-1366 93rd House District From: Janice Tinkham Sent: Wednesday, July 19, 2017 10:54 AM To: Rep93 Subject: NO to Ohioans should not have to pay for Ohio Valley Electric Corporation's bad business decisions. Rep. Ryan Smith, As a hardworking Ohioan, I go to great to budget and make prudent ?nancial decisions for myself and my family. Why should we not expect the same behavior from corporate utilities in Ohio? If I were to make a bad choice to invest in fax machines at a time when everyone else was moving towards cloud computing, how could I reasonably ask you as an Ohio policymaker to bail me out when I lose a ton of money on my fax machine investment? Senate Bill 155 and House Bill 239 essentially propose such a scenario - awarding money to entities that have . made a poor choice. The joint utility shareholders of the Ohio Valley Electric Corporation (OVEC) which are AEP, FirstEnergy, Duke and Dayton Power Light stand to receive a huge windfall if these bills become law, but at the expense of all their customers. And for What? To prop up two jointly?owned coal fired power plants Kyger Creek in Cheshire, Ohio and Clifty Creek in Madison, Indiana. How does it makes sense that an Ohioan would pay to pr0p up a plant not even located in Ohio? Senate Bill 155 and House Bill 239 comes at a huge cost: $256 million per year for the next 23 years! That?s approximately $420 that I will have to pay, eating into my budget for all the other household expenses. Senate Bill 155 and House Bill 239 prevents Ohio from moving forward, and locks Ohio electric consumers paying for coal-?red power plants that should be headed for retirement by now. If these bills become law, Ohio 1 electric consumers would be bailing out these uncompetitive coal plants until these plants are 85 years old! These bills keep us stuck in an energy past, would increase my electric bill but provide no additional bene?ts to me as a customer, and would reward corporate utilities for bad business decisions they made on their own. As their customer, I should not be responsible for propping up failing investments of Ohio utilities. For these reasons, I urge you to VOTE NO on Senate Bill 155 or House Bill 239. Janice Tinkham 4115 State Route 7 Cheshire, OH 45620 Cameron From: Cameron Sent: Thursday, July 27, 2017 11:39 AM To: 'James Brister (jbrister@zoominternet. net) Sent You a Personal Message' Subject: RE: Oppose coal bailout bills 88155 and H8239 Good Morning Mr. Brister, Thank you for reaching out to Representative Smith regarding HB 239 and SB 155. He always appreciates hearing from constituents on pending legislation and matters of public policy. have passed along your message to Representative Smith for his review. HB 239 is currently pending before House Public Utilities Committee and discussions on the bill will resume once the House is back in session in September. Please do not hesitate to reach out to our office again in the future regarding this or any other legislation or if we can be of any assistance. Best, .Leggsiatnre Aide I pf. State Representative Ryan 31111111 1311.113 Hc111is?e of Eeptesmtat??esi 91113 What 7? 5 :51 (3611113113113 QH. 3:23:13 {61213151611366 EC use} 391 1191 From: James Brister (jbrister@zoominternet.net) Sent You a Personal Message Sent: Tuesday, July 25, 2017 11:24 AM To: Rep93 Subject: Oppose coal bailout bills 58155 and H3239 Dear Rep. Ryan Smith, I do not support House Bill 239 or Senate Bill 155; Ohio electric utilities latest attempt to bail out the antiquated Kyger Creek coal plant in Ohio and Clifty Creek plant in Indiana on my dime. These plants are not competitive with today's market prices for electricity, and spew toxic pollution into our air and water. We should not have to pay more for these dirty outdated plants. 1 am pleased the bills were not passed earlier this summer and i hope you will do everything within your power as an elected official to ensure they are not approved and signed into law. Ohio utilities have been pushing coal plant bailouts at the Public Utilities Commission of Ohio for years and the message has been clear: we don't want to pay more to bailout old dirty coal plants. Ohio electric utilities should instead focus on programs like proposed Appalachian solar initiative which has the potential to deliver hundreds ofjobs to a region of Ohio that needs them most. I Ohio electric utilities' request to bail out the obsolete Kyger Creek and Ciifty Creek coal plants, plants that are no longer economically viable, is bad public policy that, in addition to costing Ohio electric customers more, will prevent Ohio from reducing dangerous emissions of carbon, soot, smog and mercury pollution. Please oppose House Bill 239 and Senate Bill 155 Sincerely, Mr. James Brister 113 Private Drive 220 Proctorville, OH 45669 jbrister@zoominterne?met (740) 886-0236- This message was sent by KnowWho, as a service provider only, on behalf of the individual noted in the sender information. Snider, Grace From: Snider, Grace Sent: Monday, June 19, 2017 2:52 PM To: Stepp, Taylor Subject: FW: press response Received this today after his response on Friday. I sent the Friday email to Rep. asking how he?d like to proceed but no response yet. From: Lehman, Ryan Sent: Monday, June 19, 2017 2:23 PM To: Snider, Grace Subject: RE: press response At this point i would probably hold off from any press releases on this bill due to being uncertain of the outcome. Ryan J. Lehman Majority Policy Adviser Of?ce of Speaker Ciifford A- Rosenberger Ohio House of Representatives ryanjehman@ohiohouseeov (614) 466?6505 From: Snider, Grace Sent: Friday, June 16, 2017 12:39 PM To: Lehman, Ryan Subject: Re: press response Sorry I missed your call. Have not responded yet, was waiting for any additions or deletions from you On Jun 15, 2017, at 8:28 PM, Lehman, Ryan wrote: Grace, I tried reaching out to you today. Did you end up responding? Ryan J. Lehman Majorig; Policy Adviser Of?ce of Speaker Clifford A. Rosenberger Ohio House of Representatives ryanlehman?lohiohouseeov (614) 466?6505 From: Snider, Grace Sent: Thursday, June 15, 2017 11:34 AM To: Lehman, Ryan Subject: press response Here is the email referenced on the anything else you?d add to response? Sent: Wednesday, June 14, 2017 4:48 PM To: Stepp, Taylor Subject: press response Hi Taylor, l?ve drafted the following take a look and see what you think. Basically, because the reporter?s question is so broad, i think we can just refer him to the sponsor testimony and see where that leads. But I?m certainly Open to other suggestions as well. As with many legislative proposals, we felt it was important to bring this issue before the General Assembly and work with our colleagues to see what kinds of ideas, solutions and concerns they had on the topic. The committee process has been extremely useful and beneficial for that purpose by providing a forum for all sides to present their positions. ibelieve the sponsor testimony presented before the House Public Utilities Committee outlines the key arguments and overarching rationale for why i decided tojointesponsor House Bill 239. i have attached that document for your reference. TES TO There are a couple details from that testimony that would like to speci?cally point out: This legislation seeks to provide recovery of prudently incurred costs only; there is no return component for the in vestor-owned utilities built into the costs. a OVEC?related cost recovery will not impact the wholesale competitive markets, nor will it affect customers? rights to shop for a retail energy supplier of their choice. 0 OR OTHER DETAILS YOU WOULD TO Thanks, Brad Miller Deputy Communications Director Press Secretary Of?ce of Speaker Clifford Rosenberger Ohio House of Representatives (614) 466-8759 Snider, Grace From: Stepp, Taylor Sent: Monday, June 19, 2017 2:49 PM To: Snider, Grace Subject: RE: press response Any update on situation? Taylor Ste pp Legislative Aide Office of Ch airman Ryan Smith 77 South High Street, 13th Floor (614) 466-1366 From: Snider, Grace Sent: Friday, June 16, 2017 4:23 PM To: Stepp, Taylor Subject: FW: press response From: Lehman, Ryan Sent: Friday, June 16, 2017 4:16 PM To: Snider, Grace <6race.Snider@ohiohouse.goy> Subject: Re: press response Hold off unless you need to. Call my cell from here on out. 740.407.2730 Sent from my Verizon 4G LTE Smortphone Original message-m" From: Snider, Grace Date: Fri, Jun 16, 2017 12:38 PM Toz'Lehman, Ryan; Cc: SubjectzRe: press response Sorry I missed your call. Have not responded yet, was waiting for any additions or deletions from you ?On Jun 15, 2017, at 8:28 PM, Lehman, Ryan wrote: Grace, litried reaching out to you today. Did you end up responding? Ryan J. Lehman Majority Policy Adviser Of?ce of Speaker Clifford A. Rosenberger Ohio House of Representatives ryanlehmanmlohiohousea? (614) 466?6505 From: Snider, Grace Sent: Thursday, June 15, 2017 11:34 AM To: Lehman, Ryan Subject: press response Here is the email I referenced on the anything else you?d add to response? From: Miller, Brad Sent: Wednesday, June 14, 2017 4:48 PM To: Stepp, Taylor Subject: press response Hi Taylor, l?ve drafted the following - take a look and see what you think. Basically, because the reporter?s question is so broad, I think we can just refer him to the sponsor testimony and see where that leads. But I?m certainly open to other suggestions as well. As with many legislative proposals, we felt it was important to bring this issue before the General Assembly and work with our colleagues to see what kinds of ideas, solutions and concerns they had on the topic. The committee process has been extremely useful and beneficial for that purpose by providing a forum for all sides to present their positions. [believe the sponsor testimony I presented before the House Public Utilities Committee outlines the key arguments and overarching rationale for why i decided to joint-sponsor House Bill 239. have attached that document for your reference. TESTIMONY TO There are a couple details from that testimony that would like to specifically point out: This legislation seeks to provide recovery of prudently incurred costs only; there is no return component for the investor-owned utilities built into the costs. - 0VEC?related cost recovery will not impact the wholesale competitive markets, nor will it affect customers? rights to shop for a retail energy supplier of their choice. 0 OTHER DETAILS YOU WOULD LIKE TO Thanks, Brad Miller Deputy Communications Director Press Secretary Of?ce of Speaker Clifford Rosenberger Ohio House of Representatives (614) 466-8759 Snider, Grace From: Keaton, John Sent: Monday, June 19, 2017 11:30 AM To: Wolf, Jimmy; 'Ferruso, Chris'; Chrisy Bowen Wright Gentil, Ryan Steve Lake Dayton Power and Light Ty Pine Lehman, Ryan; Smith, Ryan Cc: Schwartz, Patrick; Snider, Grace; Stepp, Taylor Subject: RE: HB 239 IP Meeting Amy Spiller, Ryan Gentil, and I will attend for Duke Energy. From: Jimmy.Wolf@ohiohouse.gov Sent: Monday, June 19, 2017 11:29 AM To: 'Ferruso, Chris'; Chrisy Bowen Wright Keaton, John; Gentil, Ryan Steve Lake Dayton Power and Light Ty Pine Ryan.Lehman@ohioh0use.gov; Ryan.Smith@ohiohouse.gov Cc: Grace.Snider@ohiohouse.gov; Taylor.Stepp@ohiohouse.gov Subject: HB 239 IP Meeting Exercise caution. This is an EXTERNAL email. DO NOT open attachments or click links from unknown senders or unexpected *ch email. Good Morning, Chairman Seitz asked me to reach out to invite you all to an interested party meeting regarding HB 239 (OVEC) tomorrow, June 20th at 10:15 AM. The meeting will be taking piace in room 216 of the Statehouse. will be able to begin directing people to the conference room from the State Street entrance of the Statehouse at 10 AM. If you could please let me know your availability for this meeting by the close of business today,'that would be greatly appreciated. Sincerely, Jimmy Wolf Legislative Aide to Representative Bill Seitz 30th House District 614.466.8258 Jimmy.wolf@ohiohouse.gov Snider, Grace From: Sent: To: Cc: Subject: Good Morning, Wolf, Jimmy Monday, June 19, 2017 11:29 AM ?Ferruso, Chris?; Chrisy Bowen Wright Steve Lake - Dayton Power and Light Ty Pine Lehman, Ryan; Smith, Ryan Schwartz, Patrick; Snider, Grace; Stepp, Taylor HB 239 IP Meeting Chairman Seitz asked me to reach out to invite you all to an interested party meeting regarding HB 239 (OVEC) tomorrow, June 20th at 10:15 AM. The meeting will be ta king place in room 216 of the Statehouse. I will be able to begin directing people to the conference room from the State Street entrance of the Statehouse at 10 AM. If you could please let me know your availability for this meeting by the close of business today, that would be greatly appreciated. Sincerely, Jimmy Wolf Legislative Aide to Representative Bill Seitz 30th House District 614.466.8258 Jimmy.wolf@ohiohouse.gov Snider, Grace From: Rep30 Sent: Friday, June 16; 2017 8:31 PM To: Cc: Kasych, Shawn; Bill.Beagle@ohiosenate.gov; Terhar; Louis; Lehman, Ryan; Rep48; Smith, Ryan; Carfagna, Rick Subject: RE: HB 239 Attachments: Now attached is the comp doc. From: Rep30 Sent: Friday, June 16, 2017 5:43 PM To: Cc: Kasych, Shawn Bill.Beagie@ohiosenate.gov; Terhar, Louis Bob.Peterson@ohiosenate.gov; Lehman, Ryan Rep48 Smith, Ryan Carfagna, Rick Subject: HB 239 Wiliiam J. Seitz State Representative 30thDistrict Ohio House of Representatives Columbus, Ohio 43215 614~466?8258 NIEMORANDUM To: House Public Committee From: Representative Bil! Seitz Date: June 16, 2017 Re: HE. 239 Enclosed please find the substitute bill for HB 239 (OVEC) that will be considered and hopefully voted upon on Tuesday, lune 20. As you can see from the LSC comparison document (coming shortly) a number of changes have been made to the bill to reduce the impact on ratepayers, to limit the duration of the program, to clarify what costs may be charged to ratepayers, all the while recognizing the absolute need for the Ohio utilities to be placed on a more equal footing with the many other owners of OVEC who currently receive recovery of cost and a rate of return. Under this bill, the Ohio utilities will receive no rate of return, but only cost recovery. it will be their burden to prove the prudential nature of the incurred costs. There will be no opportunity for ratepayers to be stuck with the incurred debt of OVEC should the OVEC plants close. And the rate cap is $2.50 per residential customer?and will be materially less than that for the ratepayers in service territories where the utility owns a relatively small percentage of OVEC. Please do not hesitate to call me or the bill sponsors (Representatives Smith, and Carfagna) with any questions. it you cannot support this bill in this form, the Chair would appreciate knowing that as soon as possible. CC: Chairman Beagle Senator Terhar Senator Peterson Representative Schuring I Ryan Lehman Shawn Kasych OHIO LEGISLATIVE SERVICE COMMISSION Sub. Bill Comparative Synopsis Sub. HE. 239 132nd General Assembly (H. Public Utilities) Kathleen A. Luikart This table summarizes how the latest substitute version of the bill differs from the immediately preceding version. It addresses only the topics on which the two versions differ substantively. It does not list topics on which the two bills are substantively the same. Competitive retail electric service policy regarding a "National security generation resource" (NSGR) (R.C. ensuring the continuing economic viability of historical investments made by EDUs in and supporting continued investment to preserve the ongoing benefits associated with such resources. Adds to the state policy, Adds to the state poiicy, providing clarity in cost recovery for Ohio-based electric utilities in conjunction with and encouraging EDU and affiliate divestiture of ownership interest in any NSGR. Change to originai purpose of an NSGR (RC. Provides that the corporation owning the NSGR was formed for the original purpose of providing "power" to the federal government for use in the nation?s defense or in furtherance of national interests, including the Ohio Valley Electric Corporation (OVEC). Changes the original purpose to providing "capacity and electricity. Mm, pm re overy of N56 ?t Cost Provides for recovery through an electric distribution utility's (EDU) standard service offer (880) of all costs, including any deferred costs, associated with the contractual commitments related to an NSGR (R.C. 4928.141, and (B), and and Provides for recovery through an EDU's 880 of the NSGR net impacts that are calculated and recovered through the nonbypassable rate mechanism1 through a prudency and reasonableness review as required by the bill (see below), and defines the net impacts to mean retail recovery of prudently incurred costs related to an NSGR less any revenues realized from offering the contractual commitment related to an NSGR into the wholesale markets, provided, where, the net revenues exceed net costs, such excess revenues shall be credited to customers (RC. 4928.141, and (B), and and Prudently incurred costs related to an NSGR No provision requiring NSGR costs to be prudently incurred. Defines prudently incurred costs related to an NSGR, for purposes of NSGR net impact, as costs, including deferred costs, allocated pursuant to a power agreement approved by the Federal Energy Regulatory Commission that relates to an NSGR, excluding (1) any added return on investment and (2) in the event of a premature retirement of an NSGR, any recovery of remaining debt (RC. Contractual commitment output use in 880 (RC 4928.141 Provides that an EDU with an affiliate with a contractual commitment related to an NSGR may use the output from that commitment in its 880. Provides that all EDUsin the same holding company mayjointly'use the output of the commitment in their 8803 Provides for the affiliated EDU and the EDUs in the same holding company to use the contractual commitment in their 8805 with no reference to the "output" of the commitment. 1 The bill only refers to a "rate mechanism.? But, the cross reference is specifically to the bill's requirements regarding the ?nonbypassable rate mechanism" in RC. 4928.147. Legislative Service Commission Sub. HB. 239 Affiliate NSGR contractual commitment belonged to EDU (RC. Requires the affiliate contractual commitment related to an NSGR to previously have been the commitment in order to be used in the EDU's SSO. Requires the commitment to previously have been the EDU's commitment as of the effective date of the bill in order to be used in the SSO. Recovery of affiliate share Provides for an EDU to recover any and all costs, including any deferred costs, of the af?liate's share of the NSGR (RC. 492814103?. No provision. Severability clause No provision. Specifies that the provisions regarding the use of the contractual commitment by an affiliated EDU and EDUs in the same holding company are severable and if held invalid do not affect other provisions of the bill (Section 3). Separate electric security plan 530 proceeding No provision. Permits an EDU to initiate a separate proceeding in order to implement the changes permitted by the bill regarding as part of the EDU's electric security plan 880 (RC. Nonbypassability Provides that, if an EDU agrees to offer the contractual commitment related to the NSGR into wholesale markets with any resulting revenues being credited to the benefit of retail customers, PUCO must grant recovery, as part of a market-rate offer 880 or electric security plan 880, on a nonbypassable basis (RC. and Requires an EDU's market?rate offer 880 or electric security plan 880 to provide for recovery of NSGR net impacts through a nonbypassable rate mechanism established through a prudency and reasonableness review as required by the bill (see below) (RC. and Legislative Service Commission Sub. MB. 239 Prudency and reasonableness review No provision. Me. Requires PUCO, in establishing a nonbypassable rate mechanism for recovery of NSGR net impacts, to determine the prudence and reasonableness of the EDU's actions related to an NSGR every three years and requires PUCO to include a determination of the prudence and reasonableness of the EDU's decisions related to offering the contractual commitment into the wholesale markets (RC. Cost recovery rate design No provision. Requires PUCO to determine the proper rate design for recovering or remitting the NSGR net impact, but specifies that the charge or credit for the recovery must not exceed $2.50 per customer per month for residential customers and $2,500 per customer per month for all other customers (RC. Establishment of caps for nonresidential customer classes No provision. Specifies that PUCO establish comparable caps for each nonresidential customer class at or below the $2,500 per customer level (RC. Deferral of NSGR net impact No provision. Specifies that insofar as the NSGR net impact exceeds the customer charges, the EDU must defer the remaining net impact as a regulatory asset or liability that must be recovered as determined by PUCO and subject to the rate caps (R.C. Legislative Service Commission Sub. HB. 239 Termination date of cost No provision. Requires the PUCO to provide for recovery mechanism discontinuation of the nonbypassable recovery mechanism on December 31, 2030, unless extended as provided under the bill.2 Specifies that discontinuation is subject to final reconciliation (R.C. inquiry regarding No provision. Requires PUCO to conduct an inquiry in 2029 to continuation of cost determine whether it is in the public interest to recovery mechanism continue recovery of NSGR net impacts after 2030 (R.C 492314703?. PUCO report No provision. Requires PUCO to report its findings regarding - the inquiry to the General Assembly (RC H0239-6?132docxfemr 2 The nonbypassable recovery mechanism is not subject to retroactive repeal under the bill. Thus the law will remain in effect with its actual application dependent on PUCO determination after 2030. In addition, the bill does not provide for the mechanism to be extended-only that PUCO inquire about whether it should continue and to report its findings to the General Assembly. RC. 4928.147. Legislative Service Commission Sub. H.B. 239 Snider, Grace From: Rep30 Sent: Friday, June 16, 2017 5:43 PM To: Cc: Kasych, Shawn; Bill.Beagle@ohiosenate.gov; Terhar, Louis; Bob.Peterson@ohiosenate.gov; Lehman, Ryan; Rep48; Smith, Ryan; Carfagna, Rick Subject: HB 239 Attachments: William J. Seitz State Representative 30th District Ohio House of Representatives Columbus, Ohio 43215 614?466?8258 NIEMORANDUNI To: House Public Utilities Committee From: Representative Bill Seitz Date: June 16, 2017 Re: H.B. 239 Enclosed please find the substitute bill for HB 239 (OVEC) that will be considered and hopefully voted upon on Tuesday, June 20. As you can see from the LSC comparison document (coming shortly) a number of changes have been made to the bill to reduce the impact on ratepayers, to limit the duration of the program, to clarify what costs may be charged to ratepayers, all the while recognizing the absolute need for the Ohio utilities to be placed on a more equal footing with the many other owners of OVEC who currently receive recovery of cost and a rate of return. Under this biil, the Ohio utilities will receive no rate of return, but only cost recovery. It will be their burden to prove the prudential nature of the incurred costs. There will be no opportunity for ratepayers to be stuck with the incurred debt of OVEC should the OVEC plants close. And the rate cap is $2.50 per residential customer?and will be materially less than that for the ratepayers in service territories where the utility owns a relatively small percentage of OVEC. Please do not hesitate to call me or the bill sponsors (Representatives Smith, and Carfagna) with any questions. If you cannot support this bill in this form, the Chair would appreciate knowing that as soon as possible. CC: Chairman Beagle Senator Terhar Senator Peterson Representative Schuring Ryan Lehman Shawn Kasych Reviewed As. To Form By Legislative Service Commission _132_1270-6 REVIEWED FOR FORM ONLY 132nd General Assembly Regular Session - Sub. H. B. No. 239 2017?2018 A BILL To amend sections 4928.01, 4928.02, 4928.141, 4928.142, and 4928.143 and to enact section 4928.147 of the Revised Code to allow electric distribution utilities to recover costs for a national security generation resource. BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: Section 1. That sections 4928.01, 4928.02, 4928.141, 4928.142, and 4928.143 be amended and section 4928.147 of the Revised Code be enacted to read as follows: Sec. 4928.01. (A) As used in this Chapter: (1) "Ancillary service" means any function necessary to the provision of electric transmission or distribution service to a retail customer and includes, but is not limited to, scheduling, system control, and dispatch services; reactive supply from generation resources and voltage control service; reactive supply from.transmission resources service; regulation yttazl 4xpvf bum Sub. H. B. No. 239 Page 2 _132__1270?6 service; frequency response service; energy imbalance service; operating reservewspinning reserve service; operating supplemental reserve service; load following; backnup supply service; real?power loss replacement service; dynamic scheduling; system black start capability; and network stability service. (2) "Billing and collection agent" means a fully independent agent, not affiliated with or otherWise controlled by an electric utility, electric services company, electric cooperative, or governmental aggregator subject to certification under section 4928.08 of the Revised Code, to the extent that the agent is under contract with such utility, company, cooperative, or aggregator solely to provide billing and collection for retail electric service on behalf of the utility company, cooperative, or aggregator. (3) "Certified territory" means the certified territory established for an electric supplier under sections 4933.81 to 4933.90 of the Revised Code. (4) ?Competitive retail electric service" means a 'component of retail electric service that is competitive as provided under division (B) of this section. (5) "Electric cooperative" means a not?for?profit electric light company that both is or has been financed in whole or in part under the "Rural Electrification Act of 1936," 49 Stat. 1363, 7 U.S.C. 901, and owns or operates facilities in this state to generate, transmit, or distribute electricity, or a not-for?profit successor of such company. (6) "Electric distribution utility" means an electric utility that supplies at least retail electric distribution PageS service. (7) "Electric light company" has the same meaning as in section 4905.03 of the Revised Code and includes an electric services company, but excludes any self?generator to the extent that it consumes electricity it so produces, sells that electricity for resale, or obtains electricity from a generating facility it hosts on its premises. (8) "Electric load center" has the same meaning as in section 4933.81 of the Revised Code. (9) "Electric services company" means an electric light company that is engaged on a for?profit or not?for-profit basis in the business of supplying or arranging for the supply of only a competitive retail electric service in this state. "Electric services company" includes a power marketer, power broker, aggregator, or independent power producer but excludes an electric cooperative, municipal electric utility, governmental aggregator, or billing and collection agent. (10) "Electric supplier" has the same meaning as in section 4933.81 of the Revised Code. (ll) "Electric utility" means an electric light company that has a certified territory and is engaged on a forwprofit basis either in the business of supplying a noncompetitive retail electric service in this state or in the businesses of supplying both a noncompetitive and a competitive retail electric service in this state. "Electric utility" excludes a municipal electric utility or a billing and collection agent. (12) "Firm electric service" means electric service other than nonfirm_electric service. (13) "Governmental aggregator" means a legislative Sub. H. B. No. 239 Page 4 l_132_1270-6 authority of a municipal corporation, a board of township trustees, or a board of county commissioners acting as an aggregator for the provision of a competitive retail electric service under authority conferred under section 4928.20 of the Revised Code. (14) A person acts "knowingly," regardless of the person's purpose, when the person is aware that the person's conduct will probably cause a certain result or will probably be of a certain nature. A.person has knowledge of circumstances when the person is aware that such circumstances probably exist. (15) "Level of funding for low?income customer energy efficiency programs provided through electric utility rates" means the level of funds specifically included in an electric utility's rates on October 5, 1999, pursuant to an order of the public utilities commission issued under Chapter 4905. or 4909. of the Revised Code and in effect on October 4, 1999, for the purpose of improving the energy efficiency of housing for the utility's low?income customers. The term excludes the level of any such funds committed to a specific nonprofit organization or organizations pursuant to a stipulation or contract. (16) "Low?income customer assistance programs" means the percentage of income payment plan program, the home energy assistance program, the home weatherization assistance program, and the targeted energy efficiency and weatherization program. (17) "Market development period" for an electric utility means the period of time beginning on the starting date of competitive retail electric service and ending on the applicable date for that utility as specified in section 4928.40 of the Revised Code, irreSpective of whether the utility applies to receive transition revenues under this chapter100 101 102 103 PageS l_132_1270?6 (18) "Market power" means the ability to impose on customers a sustained price for a product or service above the price that would prevail in a competitive market. (19) "Mercantile customer" means a commercial or industrial customer if the electricity consumed is for nonresidential use and the customer consumes more than seven hundred thousand kilowatt hours per year or is part of a national account involving multiple facilities in one or more states. (20) "Municipal electric utility" means a municipal corporation that owns or operates facilities to generate, transmit, or distribute electricity. (21) "Noncompetitive retail electric service" means a component of retail elec:ric service that is noncompetitive as provided under division (B) of this section. (22) "Nonfirm electric service" means electric service provided pursuant to a schedule filed under section 4905.30 of the Revised Code or pursuant to an arrangement under section 4905.31 of the Revised Code, which schedule or arrangement includes conditions that may require the customer to curtail or interrupt electric usage during nonemergency circumstances upon notification by an electric utility. (23) "Percentage of income payment plan arrears" means funds eligible for collection through the percentage of income payment plan rider, but uncollected as of July 1, 2000. (24) "Person" has the same meaning as in section 1.59 of the Revised Code. (25) "Advanced energy project" means any technologies, products, activities, or management practices or strategies that 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 Sub. H. B. No. 239 Page 6 _132_1270-6 facilitate the generation or use of electricity or energy and that reduce or support the reduction of energy consumption or support the production of clean, renewable energy for industrial, distribution, commercial, institutional, governmental, research, not?for?profit, or residential energy users, including, but not limited to, advanced energy resources and renewable energy resources. "Advanced energy project" also includes any project described in division (A), (B), or (C) of section 4928.621 of the Revised Code. (26) "Regulatory assets" means the unamortized net regulatory assets that are capitalized or deferred on the regulatory books of the electric utility, pursuant to an order or practice of the public utilities commission or pursuant to generally accepted accounting principles as a result of a prior commission rate?making decision, and that would otherwiSe have been charged to expense as incurred or would not have been capitalized or otherwise deferred for future regulatory consideration absent commission action. "Regulatory assets" includes, but is not limited to, all deferred demand?side management costs; all deferred percentage of income payment plan arrears; post?in?service capitalized charges and assets recognized in connection with statement of financial accounting standards no. 109 (receivables from customers for income taxes]; future nuclear decommissioning costs and fuel disposal costs as those costs have been determined by the commission in the electric utility's most recent rate or accounting application proceeding addressing such costs; the undepreciated costs of safety and radiation control equipment on nuclear generating plants owned or leased by an electric utility; and fuel costs currently deferred pursuant to the terms of one or more settlement agreements approved by the commission. 133 134 135 136 137 138' 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 Page? E_132m1270-6 (27) "Retail electric service" means any service involved in supplying or arranging for the supply of electricity to ultimate consumers in this state, from the point of generation to the point of consumption. For the purposes of this chapter, retail electric service includes one or more of the following "service components": generation service, aggregation service, power marketing service, power brokerage service, transmission service, distribution service, ancillary service, metering service, and billing and collection service. (28) "Starting date of competitive retail electric service" means January 1, 2001. (29) "Customer?generator" means a user of a net metering system. (30) "Net metering" means measuring the difference in an applicable billing period between the electricity supplied by an electric service provider and the electricity generated by a customer?generator that is fed back to the electric service provider. (31) "Net metering system" means a facility for the production of electrical energy that does all of the following: Uses as its fuel either solar, wind, biomass, landfill gas, or hydropower, or uses a microturbine or a fuel cell; Is located on a customer?generator?s premises; Operates in parallel with the electric utility's transmission and distribution facilities; Is intended primarily to offset part or all of the customer?generator's requirements for electricity. (32) "Self~generator" means an entity in this state that 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 Page8 owns or hosts on its premises an electric generation facility that produces electricity primarily for the owner's consumption and that may provide any such excess electricity to another entity, whether the facility is installed or Operated by the owner or by an agent under a contract. (33) "Rate plan" means the standard service offer in effect on the effective date of the amendment of this section by S.B. 221 of the 127th general assembly, July 31, 2008. (34) "Advanced energy resource" means any of the following: Any method or any modification or replacement of any property, process, device, structure, or equipment that increases the generation output of an electric generating facility to the extent such efficiency is achieved without additional carbon dioxide emissions by that facility; Any distributed generation system.consisting of customer cogeneration technology; Clean coal technology that includes a carbonwbased product that is chemically altered before combustion to demonstrate a reduction, as expressed as ash, in emissions of nitrous oxide, mercury, arsenic, chlorine, sulfur dioxide, or sulfur trioxide in accordance with the American society of testing and materials standard D1757A or a reduction of metal oxide emissions in accordance with standard D5142 of that society, or clean coal technology that includes the design capability to control or prevent the emission of carbon dioxide, which design capability the commission shall adopt by rule and shall be based on economically feasible best available technology or, in the absence of a determined best available 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 PageQ 32_1270-6 technology: Shall be of the highest level of economically feasible design capability for which there exists generally accepted scientific opinion; Advanced nuclear energy technology consisting of generation technology as defined by the nuclear regulatory commission; other, later technology; or significant improvements to existing facilities; Any fuel cell used in the generation of electricity, including, but not limited to, a proton exchange membrane fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, or solid oxide fuel cell; Advanced solid waste or construction and demolition debris conversion technology, including, but not limited to, advanced stoker technology, and advanced fluidized bed gasification technology, that results in measurable greenhouse gas emissions reductions as calculated pursuant to the United States environmental protection agency's waste reduction model Demandwside management and any energy efficiency improvement; Any new, retrofitted, refueled, or repowered generating facility located in Ohio, including a simple or natural gas generating facility or a generating facility that uses biomass, coal, modular nuclear, or any other fuel as its input; Any uprated capacity of an existing electric generating facility if the uprated capacity results from the deployment of advanced technology. "Advanced energy resource" does not include a waste energy 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 Page10 l__132__1270-6 recovery system that is, or has been, included in an energy efficiency program of an electric distribution utility pursuant to requirements under section 4928.66 of the Revised Code. (35) "Air contaminant source" has the same meaning as in section 3704.01 of the Revised Code. (36) "Cogeneration technology" means technology that produces electricity and useful thermal output simultaneously. "Renewable energy resource" means any of the following: Solar photovoltaic or solar thermal energy; (ii) Wind energy; Power produced by a hydroelectric facility; (iv) Power produced by a run?of?the?river hydroelectric facility placed in service on or after January 1, 1980, that is located within this state, relies upon the Ohio river, and operates, or is rated to operate, at an aggregate capacity of forty or more megawatts; Geothermal energy; (vi) Fuel derived from solid wastes, as defined in section 3734.01 of the Revised Code, through fractionation, biological decomposition, or other process that does not principally involve combustion; (vii) Biomass energy; Energy produced by cogeneration technology that is placed into service on or before December 31, 2015, and for which more than ninety per cent of the total annual energy input is from_combustion of a waste or byproduct gas from an air 250 251 252 P0 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 Page11 __132__1270-6 contaminant source in this state, which source has been in operation since on or before January 1, 1985, provided that the cogeneration technology is a part of a facility located in a county having a population of more than three hundred sixty?five thousand but less than three hundred seventy thousand according to the most recent federal decennial census; (ix) Biologically derived methane gas; Heat captured from a generator of electricity, boiler, or heat exchanger fueled by biologically derived methane gas; (xi) Energy derived from nontreated by?products of the pulping process or wood manufacturing process, including bark, wood chips, sawdust, and lignin in spent pulping liquors. "Renewable energy resource" includes, but is not limited to, any fuel cell used in the generation of electricity, including, but not limited to, a proton exchange membrane fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, or solid oxide fuel cell; wind turbine located in the state's territorial waters of Lake Erie; methane gas emitted from an abandoned coal mine; waste energy recovery system placed into service or retrofitted on or after the effective date of the amendment of this section by 3.3. 315 of the 129th general assembly, September 10, 2012, except that a waste energy recovery system.described in division of this section may be included only if it was placed into service between January 1, 2002, and December 31, 2004; storage facility that will promote the better utilization of a renewable energy resource; or distributed generation system_used by a customer to generate electricity from any such energy. "Renewable energy resource" does not include a waste 277 278 279 280 281 282 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 Sub. H. B. No. 239 Page 12 l__132__1270-6 energy recovery system that is, or was, on or after January 1, 2012, included in an energy efficiency program of an electric distribution utility pursuant to requirements under section 4928.66 of the Revised Code. As used in division of this section, "hydroelectric facility" means a hydroelectric generating facility that is located at a dam on a river, or on any water discharged to a river, that is within or bordering this state or within or bordering an adjoining state and meets all of the following standards: The facility provides for river flows that are not detrimental for fish, wildlife, and water quality, including seasonal flow fluctuations as defined by the applicable licensing agency for the facility. (ii) The facility demonstrates that it complies with the water quality standards of this state, which compliance may consist of certification under Section 401 of the "Clean Water Act of 1977," 91 Stat. 1598, 1599, 33 U.S.C. 1341, and demonstrates that it has not contributed to a finding by this state that the river has impaired water quality under Section 303(d} of the "Clean Water Act of 1977," 114 Stat. 870, 33 U.S.C. 1313. The facility complies with mandatory prescriptions regarding fish passage as required by the federal energy regulatory commission license issued for the project, regarding fish protection for riverine, anadromous, and catadromous fish. (iv) The facility complies with the recommendations of the Ohio environmental protection agency and with the terms of its federal energy regulatory commission license regarding watershed 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 332 333 334 Sub. H. B. No. 239 Page 13 l__1 325 270-6 protection, mitigation, or enhancement, to the extent of each agency?s respective jurisdiction over the facility. The facility complies with provisions of the "Endangered Species Act of 1973," 87 Stat. 884, 16 U.S.C. 1531 to l544, as amended. (vi) The facility does not harm_cultural resources of the area. This can be shown through compliance with the-terms of its federal energy regulatory commission license or, if the facility is not regulated by that commission, through development of a plan approved by the Ohio historic preservation office, to the extent it has jurisdiction over the facility. (vii) The facility complies with the terms of its federal energy regulatory commission license or exemption that are related to recreational access, accommodation, and facilities or, if the facility is not regulated by that commission, the facility complies with similar requirements as are recommended by resource agencies, to the extent they have jurisdiction over the facility; and the facility provides access to water to the public without fee or charge. The facility is not recommended for removal by any federal agency or agency of any state, to the extent the particular agency has jurisdiction over the facility. (38) "Waste energy recovery system" means either of the following: A facility that generates electricity through the conversion of energy from either of the following: Exhaust heat from engines or manufacturing, industrial, commercial, or institutional sites, except for exhaust heat from a facility whose primary purpose is the 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 Page14 generation of electricity; (ii) Reduction of pressure in gas pipelines before gas is- distributed through the pipeline, provided that the conversion of energy to electricity is achieved without using additional fossil fuels. A facility at a state institution of higher education as defined in section 3345.011 of the Revised Code that recovers waste heat from engines or combustion turbines and that simultaneously uses the recovered heat to produce steam, provided that the facility was placed into service between January 1, 2002, and December 31, 2004. (39) "Smart grid" means capital improvements to an electric distribution utility's distribution infrastructure that improve reliability, efficiency, resiliency, or reduce energy demand or use, including, but not limited to, advanced metering and automation of system_functions. (40) "Combined heat and power system" means the coproduction of electricity and useful thermal energy from the same fuel source designed to achieve thermal?efficiency levels of at least sixty per cent, with at least twenty per cent of the system?s total useful energy in the form_of thermal energy. (41) "National security generation resource" means all generating facilities owned directly or indirectly by a corporation that was formed prior to 1960 by investor?owned utilities for the original purpose of providing capacity and electricity to the federal government for use in the nation's defense or in furtherance of national interests, including the Ohio valley electric corporation. (42} "Prudently incurred costs related to a national 364 365 366 367 368 369 370 371 372 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388' 389 390 391 392 Sub. H. B. No. 239 Page 15 securitv generation resource" means costs, including deferred costs, allocated pursuant to a power agreement approved bv the federal energv regulatorv commission that relates to a national securitv generation resource. Such costs shall exclude anv added return on investment and, in the event of a premature retirement of a national securitv generation resource, shall exclude anv recoverv of remaining debt. (43) "National securitv generation resource net impact" means retail recoverv of prudentlv incurred costs related to a national securitv generation resource less anv revenues realized from offering the contractual commitment related to a national securitv generation resource into the wholesale markets, provided, where, the net revenues exceed net costs, such excess revenues shall be credited to customers. (B) For the purposes of this chapter, a retail electric service component shall be deemed a competitive retail electric service if the service component is competitive pursuant to a declaration by a provision of the Revised Code or pursuant to an order of the public utilities commission authorized under division (A) of section 4928.04 of the Revised Code. Otherwise, the service component shall be deemed a noncompetitive retail electric service. See. 4928.02. It is the policy of this state to do the following throughout this state: (A) Ensure the availability to consumers of adequate, reliable, safe, efficient, nondiscriminatory, and reasonably priced retail electric service; (B) Ensure the availability of unbundled and comparable retail electric service that provides consumers with the 393 "394 395 396 397 398 399 400 401 402 403 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 Page16 l__132__1270-6 supplier, price, terms, conditions, and quality options they elect to meet their respective needs; (C) Ensure diversity of electricity supplies and suppliers, by giving consumers effective choices over the selection of those supplies and suppliers and by encouraging the development of distributed and small generation facilities; (D) Encourage innovation and market access for cost? effective supply? and demand?side retail electric service including, but not limited to, demand?side management, time? differentiated pricing, waste energy recovery systems, smart grid programs, and implementation of advanced metering infrastructure; (E) Encourage cost?effective and efficient access to information regarding the operation of the transmission and distribution systems of electric utilities in order to promote both effective customer choice of retail electric service and the development of performance standards and targets for service quality for all consumers, including annual achievement reports written in plain language; (F) Ensure that an electric utility's transmission and distribution systems are available to a customer?generator or owner of distributed generation, so that the customer?generator or owner can market and deliver the electricity it produces; (G) Recognize the continuing emergence of competitive electricity markets through the development and implementation of flexible regulatory treatment; (H) Ensure effective competition in the provision of retail electric service by avoiding anticompetitive subsidies flowing from a noncompetitive retail electric service to a 422 423 424 425 426 427 428 429 430 431 432 433 434 435 436 437 438 439 440 441 442 443 444 445 446 447 448 449 450 Page17 l_132_1270-6 competitive retail electric service or to a product or service other than retail electric service, and vice versa, including by prohibiting the recovery of any generation?related costs through distribution or transmission rates; (I) Ensure retail electric service consumers protection against unreasonable sales practices, market deficiencies, and market power; (J) Provide coherent, transparent means of giving appropriate incentives to technologies that can adapt successfully to potential environmental mandates; (K) Encourage implementation of distributed generation across customer classes through regular review and updating of administrative rules governing critical issues such as, but not limited to, interconnection standards, standby charges, and net metering; (L) Protect at?risk populations, including, but not limited to, when considering the implementation of any new advanced energy or renewable energy resource; (M) Encourage the education of small business owners in this state regarding the use of, and encourage the use of, energy efficiency programs and alternative energy resources in their businesses; (N) Facilitate the state's effectiveness in the global economy; (0) Provide clarity in cost recovery for OhiOWbased electric utilities in coniunction with national security generation resources and encourage electric distribution utility and affiliate divestiture of ownership interest in any national security generation resource. 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 Sub. H. a. No. 239 1n carrying out this policy, the commission shall consider rules as they apply to the costs of electric distribution infrastructure, including, but not limited to, line extensions, for the purpose of development in this state. Sec. 4928.141. (A) Beginning January 1, 2009, an electric distribution utility shall provide consumers, on a comparable and nondiscriminatory basis within its certified territory, a standard service offer of all competitive retail electric services necessary to maintain essential electric service to consumers, including a firm_supply of electric generation Service. To that end, the electric distribution utility shall apply to the public utilities commission to establish the standard service offer in accordance with section 4928.142 or 4928.143 of the Revised Code and, at its discretion, may apply simultaneously under both 1 1n ?Inr-J lipiuu. Only a standard service offer authorized in accordance with section 4928.142 or 4928.143 of the Revised Code, shall serve as the utility's standard service offer for the purpose of compliance with this section; and that standard service offer shall serve as the utility's default standard service offer for the purpose of section 4928.14 of the Revised Code. Page18 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 495 496 497 498 499 500 501 502 503 504 505 506 507 508 509 510 Sub. H. a. No. 239 Page 19 tion the plan' term. A standard service offer under C) section 4928.142 or 4928.143 of the Revised Code shall include automatic recovery, subject to audit and reconciliation, of all national securitv generation resource net impacts that are calculated and recovered in accordance with the rate mechanism established under section 4928.147 of the Revised Code, but shall exclude any previously authorized allowances for transition costs, with such exclusion being effective on and after the date that the allowance is scheduled to end under the utility's rate plan. (B) An electric distribution utilitv with an affiliate that has a contractual commitment related to a national security generation resource mav use the affiliate's contractual commitment in its standard service offer and recover the national securitv generation resource net impact under division of section 4928.142 or division of section 4928.143 of the Revised Code, provided that, as of the effective date of 8.8. 239 of the 132nd general assemblv, the affiliate's contractual commitment was previouslv the contractual commitment of the electric distribution utilitv. All electric distribution utilities in the same holding companv system mav iointlv use the affiliate?s contractual commitment and recover the national security generation resource net impact under division of section 4928.142 or division of section 4928.143 of the Revised Code. i?L_The commission shall set the time for hearing of a filing under section 4928.142 or 4928.143 of the Revised Code, send written notice of the hearing to the electric distribution utility, and publish notice in a newspaper of general circulation in each county in the utility's certified territory. The commission shall adopt rules regarding filings under those 511 512 513 514 515 516 517 518 519 520 521 522 523 524 525 526 527 528 529 530 531 532 533 534 535 536 537 538 539 540 541 PageZO l_132_1270-6 sections. Sec. 4928.142. (Al For the purpose of complying with section 4928.141 of the Revised Code and subject to division (D) of this section Sede, an electric distribution utility may establish a standard service offer price for retail electric generation service that is delivered to the utility under a market?rate electric distribution utilitv shall have the right within one hundred twenty davs of the effective date of H.B. 239 of the 132nd deneral assemblv to file an application to reopen, update, or amend its thenncurrent marketwrate offer in order to implement the amended version of this section, which proceeding shall not otherwise reopen matters previouslv decided. The supplv and pricing of electric generation service under a market?rate offer shall be determined through a competitive bidding process that provides for all of the following: Open, fair, and transparent competitive solicitation; Clear product definition; Standardized bid evaluation criteria; Oversight by an independent third party that shall design the solicitation, administer the bidding, and ensure that the criteria specified divisions to of this section are met; Evaluation of the submitted bids prior to the selection of the least?cost bid winner or winners. No generation supplier shall be prohibited frOm 543 544 545 546 547 548 549 550 551 552 553 554 555 556 557 558 559 560 561 562 563 564 565 566 567 568 569 Pag321 l__132__1270?6 participating in the bidding process. 570 (2) The market?rate offer shall include provisions for 571 recovery, through a nonbypassable rate mechanism, of all 572 national security generation resource net impacts pursuant to 573 section 4928.l47 of the Revised Code. 574 i?L_The public utilities commission shall modify rules, or 575 adopt new rules as necessary, concerning the conduct of the 576 competitive bidding process and the qualifications of bidders, 577 which rules shall fester supplier participation in the bidding 578 process and shall be consistent with the requirements of 579 division of this section. 580 (8) Prior to initiating a competitive bidding process for 581 a market?rate offer under division (A) of this section, the 582 electric distribution utility shall file an application with the 583 commission. An electric distribution utility may file its 584 application with the commission prior to the effective date of 585 the commission rules required under division this 586 section, and, as the commission determines necessary, the 587 utility shall immediately conform its filing to the rules upon 588 their taking effect. 589 An application under this division shall detail the 590 electric distribution utility's proposed compliance with the 591 requirements of division of this section and with 592 commission rules under division this section and 593 demonstrate that all of the following requirements are met: 594 The electric distribution utility or its transmission 595 service affiliate belongs to at least one regional transmission 596 organization that has been approved by the federal energy 597 regulatory commission; or there otherwise is comparable and 598 l_132_1270-6 nondiscriminatory access to the electric transmission grid. (2) Any such regional transmission organization has a market?monitor function and the ability to take actions to identify and mitigate market power or the electric distribution utility's market conduct; or a similar market monitoring function exists with commensurate ability to identify and monitor market conditions and mitigate conduct associated with the exercise of market power. (3) A published source of information is available publicly or through subscription that identifies pricing information for traded electricity on? and off?peak energy products that are contracts for delivery beginning at least two years from the date of the publication and is updated on a regular basis. The commission shall initiate a proceeding and, within ninety days after the application's filing date, shall determine by order whether the electric distribution utility and its market?rate offer meet all of the foregoing requirements. If the finding is positive, the electric distribution utility may initiate its competitive bidding process. If the finding is negative as to one or more requirements in division or of this section, the commission in the order shall direct the electric distribution utility regarding how any deficiency may be remedied in a timely manner to the commission?s satisfaction; otherwise, the electric distribution utility shall withdraw the application. However, if such remedy is made and the subsequent finding is positive and also if the electric distribution utility made a simultaneous filing under this section and section 4928.143 of the Revised Code, the utility shall not initiate its competitive bid until at least one PageZZ 599 600 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 619 620 621 622 623 624 625 626 627 628 Page23 i_132_1270-6 hundred fifty days after the filing date of those applications. .If the electric distribution utility withdraws the application, the commission shall issue an order as is necessary to ensure automatic recovery of all national security generation resource net impacts. (C) Upon the completion of the competitive bidding process authorized by divisions (A) and (B) of this section, including for the purpose of division (D) of this section, the commission shall select the least-cost bid winner or winners of that process, and such selected bid or bids, as prescribed as retail rates by the commission, shall be the electric distribution utility's standard service offer unless the commission, by order issued before the third calendar day following the conclusion of the competitive bidding process for the market rate offer, determines that one or more of the following criteria were not met: (1) Each portion of the bidding process was oversubscribed, such that the amount of supply bid upon was greater than the amount of the load bid out. (2) There were four or more bidders. (3) At least twenty?five per cent of the load is bid upon by one or more persons other than the electric distribution utility. All costs incurred by the electric distribution utility as a result of or related to the competitive bidding process or to procuring generation service to provide the standard service offer, including the costs of energy and capacity and the costs of all other products and services procured as a result of the competitive bidding process, shall be timely recovered through 629 630 631 632 633 634 635 636 637 638 639 640 641 642 643 644 645 646 647 648 649 650 651 652 653 654 655 656 657 Page24 the standard service offer price, and, for that purpose, the commission shall approve a reconciliation mechanism, other recovery mechanism, or a combination of such mechanisms for the utility. (D) The first application filed under this section by an electric distribution utility that, as of July 31, 2008, directly owns, in whole or in part, operating electric generating facilities that had been used and useful in this state shall require that a portion of that utility's standard service offer load for the first five years of the market rate offer be competitively bid under division (A) of this section as follows: ten per cent of the load in year one, not more than twenty per cent in year two, thirty per cent in year three, forty per cent in year four, and fifty per cent in year five. Consistent with those percentages, the commission shall determine the actual percentages for each year of years one through five. The standard service offer price for retail electric generation service under this first application shall be a proportionate blend of the bid price and the generation service price for the remaining standard service offer load, which latter price shall be equal to the electric distribution utility?s most recent standard service offer price, adjusted upward or downward as the commission determines reasonable, relative to the jurisdictional portion of any known and measurable changes from the level of any one or more of the following costs as reflected in that most recent standard service offer price: (1) The electric distribution utility's prudently incurred cost of fuel used to produce electricity; (2) Its prudently incurred purchased power costs; 658 659 660 661 662 663 664 665 666 667 668 669 670 671 672 673 674 '675 676 677 678 679 680 681 682 683 684 PageZS (3) Its prudently incurred costs of satisfying the supply and demand portfolio requirements of this state, including, but not limited to, renewable energy resource and energy efficiency requirements; (4) Its costs prudently incurred to comply with environmental laws and regulations, with consideration of the derating of any facility associated with those costs. In making any adjustment to the most recent standard service offer price on the basis of costs described in division (D) of this section, the commission shall include the benefits that may become available to the electric distribution utility as a result of or in connection with the costs included in the adjustment, including, but not limited to, the utility's receipt of emissions credits or its receipt of tax benefits or of other benefits, and, accordingly, the commission may impose such conditions on the adjustment to ensure that any such benefits are properly aligned with the associated cost responsibility. The commission shall also determine how such adjustments will affect the electric distribution utility's return on common equity that may be achieved by those adjustments. The commission shall not apply its consideration of the return on common equity to reduce any adjustments authorized under this division unless the adjustments will cause the electric distribution utility to earn a return on common equity that is significantly in excess of the return on common equity that is earned by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. The burden of proof for demonstrating that significantly excessive earnings will not occur shall be on the electric distribution utility. 688 689 690 691 695 696 697 698 699 700 701 702 703 704 705 706 707 708 709 710 711 712 713 714 715 716 717 Sub. H. B. No. 239 Page 26 Additionally, the commission may adjust the electric distribution utility's most recent standard service offer price by such just and reasonable amount that the commission determines necessary to address any emergency that threatens the utility?s financial integrity or to ensure that the resulting revenue available to the utility for providing the standard service offer is not so inadequate as to result, directly or indirectly, in a taking of property without compensation pursuant to Section 19 of Article I, Ohio Constitution. The electric distribution utility has the burden of demonstrating that any adjustment to its most recent standard service offer price is proper in accordance with this division. (E) Beginning in the second year of a blended price under division (D) of this section and notwithstanding any other requirement of this section, the commission may alter prospectively the proportions specified in that division to mitigate any effect of an abrupt or significant change in the electric distribution utility's standard service offer price that would otherwise result in general or with respect to any rate group or rate schedule but for such alteration. Any such alteration shall be made not more often than.annually, and the commission shall not, by altering those proportions and in any event, including because of the length of time, as authorized under division (C) of this section, taken to approve the market rate offer, cause the duration of the blending period to exceed ten years as counted from the effective date of the approved market rate offer. Additionally, any such alteration shall be limited to an alteration affecting the prospective proportions used during the blending period and shall not affect any blending proportion previously approved and applied by the commission under this division. 718 719 720 721 722 723 724 725 726 727 728 729 730 731 732 733 734 735 736 737 738 739 740 741 742 743 744 745 746 747 748 Page27 (F) An electric distribution utility that has received commission approval of its first application under division (C) of this section shall not, nor ever shall be authorized or required by the commission to, file an application under section 4928.143 of the Revised Code. Sec. 4928.143. (A) For the purpose of complying with section 4928.141 of the Revised Code, an electric distribution utility may file an application for public utilities commission approval of an electric security plan as prescribed under division (B) of this section. The utility may file that application prior to the effective date of any rules the commission may adopt for the purpose of this section, and, as the commission determines necessary, the utility immediately shall conform its filing to those rules upon their taking effect. An electric distribution utility shall have the rioht within one hundred twenty days of the effective date of 8.3. 239 of the l32nd qeneral assembly to file an application to reopen, update, or amend its thenwcurrent standard service offer or initiate a separate proceeding in order to implement the amended version of this section, which proceedinq shall not otherwise reopen matters_previouslv decided. Upon approval of an update_or amendment to implement the chanqe in law, any terms and I conditions of the prior electric security plan relatind to a national security Generation resource shall no lonoer be in effect. (B) Notwithstanding any other provision of Title XLIX of the Revised Code to the contrary except division (D) of this section, divisions (I), (J), and (K) of section 4928.20, division (E) of section 4928.64, and section 4928.69 of the Revised Code: 749 750 751 752 753 754 755 756 757 758 759 760 761 762 763 764 765 766 767 768 769 770 771 772 773 774 775 776 777 778 Sub. H. B. No. 239 Page 28 (1) An electric security plan shall include provisions relating to the supply and pricing of electric generation service and shall include provisions for recovery, through a nonbypassable rate mechanism, of all national security generation resource net impacts pursuant to secticn 4928.147 of the Revised Code. In addition, if the proposed electric security plan has a term_longer than three years, it may include provisions in the plan to permit the commission to test the plan pursuant to division (E) of this section and any transitional conditions that should be adopted by the commissicn if the commission terminates the plan as authorized under that division. The plan may provide for or include, without limitation, any of the following: Automatic recovery of any of the following costs of the electric distribution utility, provided the cost is prudently incurred: the cost of fuel used to generate the electricity supplied under the offer; the cost of purchased power supplied under the offer, including the cost of energy and capacity, and including purchased power acquired from an affiliate; the cost of emission allowances; and the cost of federally mandated carbon or energy taxes; A reasonable allowance for construction work in progress for any of the electric distribution utility's cost of constructing an electric generating facility or for an environmental expenditure for any electric generating facility of the electric distribution utility, provided the cost is incurred or the expenditure occurs on or after January 1, 2009. Any such allowance shall be subject to the construction work in progress allowance limitations of division (A) of section 779 780 78l 782 783 784 785 786 787 788 789 790 791 792 793 794 795 796 797 798 799 800 801 802 803 804 805 806 807 808 Page29 [_132_1270-6 4909.15 of the Revised Code, except that the commission may authorize such an allowance upon the incurrence of the cost or occurrence of the expenditure. No such allowance for generating facility construction shall be authorized, however, unless the commission first determines in the proceeding that there is need for the facility based on resource planning projections submitted by the electric distribution utility. Further, no such allowance shall be authorized unless the facility's construction was sourced through a competitive bid process, regarding which process the commission may adopt rules. An allowance approved under division of this section shall be established as a nonbypassable surcharge for the life of the facility. The establishment of a nonbypassable surcharge for the life of an electric generating facility that is owned or operated by the electric distribution utility, was sourced through a competitive bid process subject to any such rules as the commission adopts under division of this section, and is newly used and useful on or after January 1, 2009, which surcharge shall cover all costs of the utility specified in the application, excluding costs recovered through a surcharge under division of this section. However, no surcharge shall be authorized unless the commission first determines in the proceeding that there is need for the facility based on resource planning projections submitted by the electric distribution utility. Additionally, if a surcharge is authorized for a facility pursuant to plan approval under division (C) of this section and as a condition of the continuation of the surcharge, the electric distribution utility shall dedicate to Ohio consumers the capacity and energy and the rate associated with the cost of that facility. Before the commission authorizes any surcharge pursuant to this division, it may consider, as 809 810 811 812 813 814 815 816 817 818 819 820 821 822 823 824 825 826 827 828 829 830 831 832 833 834 835 836 837 838 839 Page30 i_132__1270?6 applicable, the effects of any decommissioning, deratings, and retirements. Terms, conditions, or charges relating to limitations on customer shopping for retail electric generation service, bypassability, standby, back?up, or supplemental power service, default service, carrying costs, amortization periods, and accounting or deferrals, including future recovery of such deferrals, as would have the effect of stabilizing or providing certainty regarding retail electric service; Automatic increases or decreases in any component of the standard service offer price; Consistent with sections 4928.23 to 4928.2318 of the Revised Code, both of the following: Provisions for the electric distribution utility to securitize any phase?in, inclusive of carrying charges, of the utility's standard service offer price, which phase-in is authorized in accordance with section 4928.144 of the Revised Code; (ii) Provisions for the recovery of the utilityls cost of securitization. Provisions relating to transmission, ancillary, congestion, or any related service required for the standard service offer, including provisions for the recovery of any cost of such service that the electric distribution utility incurs on or after that date pursuant to the standard service offer; Provisions regarding the utility's_distribution service, including, without limitation and notwithstanding any provision of Title XLIX of the Revised Code to the contrary, provisions regarding single issue ratemaking, a revenue 840 841 842 843 844 845 846 847 848 849 850 851 852 853 854 855 856 857 858 859 860 _861 862 863 864 865 866 867 868 Sub. H. B. No. 239 Page 31 decoupling mechanism or any other incentive ratemaking, and provisions regarding distribution infrastructure and modernization incentives for the electric distribution utility. The latter may include a long?term energy delivery infrastructure modernization plan for that utility or any plan providing for the utility's recovery of costs, including lost revenue, shared savings, and avoided costs, and a just and reasonable rate of return on such infrastructure modernization. As part of its determination as to whether to allow in an electric distribution utility's electric security plan inclusion of any provision described in division of this section, the commission shall examine the reliability of the electric distribution utility's distribution system and ensure that customers' and the electric distribution utility's expectations are aligned and that the electric distribution utility is placing sufficient emphasis on and dedicating sufficient resources to the reliability of its distribution system. Provisions under which the electric distribution utility may implement economic development, job retention, and energy efficiency programs, which provisions may allocate program.costs across all classes of customers of the utility and those of electric distribution utilities in the same holding company system. The burden of proof in the proceeding shall be on the electric distribution utility, provided that the public utilities commission must approve automatic cost recovery of all national security generation resource net impacts consistent with the prudence review in section 4928.147 of the Revised Code. The commission shall issue an order under this division 869 870 871 872 873 874 875 876 8?8 879 880 881 882 883 884 885 886 887 888 889 890 891 892 893 894 895 896 897 898 Page32 _132_1270?6 for an initial application under this section not later than one hundred fifty days after the application's filing date and, for any subsequent application by the utility under this section, not later than two hundred days after the application's filing date. Subject to division (D) of this section, the commission by order shall approve or modify and approve an application filed under division (A) of this section if it finds that the electric security plan so approved, including its pricing and all other terms and conditions, including any deferrals and any future recovery of deferrals, is more favorable in the aggregate as compared to the expected results that would otherwise apply under section 4928.142 of the Revised Code. Additionally, if the commission so approves an application that contains a surcharge under division or of this section, the commission shall ensure that the benefits derived for any purpose for which the surcharge is established are reserved and made available to those that bear the surcharge. Otherwise, the commission by order shall disapprove the application. If the commission modifies and approves an application under division of this section, the electric distribution utility may withdraw the application, thereby terminating it, and may file a new standard service offer under this section or a standard service offer under section 4928.142 of the Revised Code. If the utility terminates an application pursuant to division of this section or if the commission disapproves an application under division of this section, the commission shall issue such order as is necessary to ensure automatic cost recovery of all national security generation resource net impacts and to continue the provisions, 899 900 901 902 -903 904 905 906 907 908 909 910 911 912 913 914 915 916 917 918 919 920 921 922 923 924 925 926 927 928 929 Sub. H. B. No. 239 Page 33 terms, and conditions of the utility's most recent standard service offer, along with any expected increases or decreases in fuel costs from those contained in that offer, until a subsequent offer is authorized pursuant to this section or section 4928.142 of the Revised Code, respectively. (D) Regarding the rate plan requirement of division (A) of section 4928.141 of the Revised Code, if an electric distribution utility tha: has a rate plan that extends beyond December 31, 2008, files an application under this section for the purpose of its compliance with division (A) of section 4928.141 of the Revised Code, that rate plan and its terms and conditions are hereby incorporated into its proposed electric security plan and shall continue in effect until the date scheduled under the rate plan for its expiration, and that portion of the electric security plan shall not be subject to commission approval or disapproval under division (C) of this section, and the earnings test provided for in division (F) of this section shall not apply until after the expiration of the rate plan. However, that utility may include in its electric security plan under this section, and the commission may approve, modify and approve, or disapprove subject to division (C) of this section, provisions for the incremental recovery or the deferral of any costs that are not being recovered under the rate plan and that the utility incurs during that continuation period to comply with section 4928.141, division (8) of section 4928.64, or division (A) of section 4928.66 of the Revised Code. (E) If an electric security plan approved under division (C) of this sectiOn, except one withdrawn by the utility as authorized under that division, has a term, exclusive of phase~ ins or deferrals, that exceeds three years from the effective date of the plan, the commission shall test the plan in the 930 931 932 933 934 935 936 937 938 939 940 941 942 943 944 945 946 947 948 949 950 95l 952 953 954 955 956 957 958 959 960 Sub. H. B. No. 239 l_132_1270-6 fourth year, and if applicable, every fourth year thereafter, to determine whether the plan, including its thenHexisting pricing and all other terms and conditions, including any deferrals and any future recovery of deferrals, continues to be more favorable in the aggregate and during the remaining term of the plan as compared to the expected results that would otherwise apply under section 4928.142 of the Revised Code. The commission shall also determine the prospective effect of the electric security plan to determine if that effect is substantially likely to provide the electric distribution utility with a return on common equity that is significantly in excess of the return on common equity that is likely to be earned by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. The burden of proof for demonstrating that significantly excessive earnings will not occur shall be on the electric distribution utility. If the test results are in the negative or the commission finds that continuation of the electric security plan will result in a return on equity that is significantly in excess of the return on common equity that is likely to be earned by publicly traded companies, including utilities, that will face comparable business and financial risk, with such adjustments for capital structure as may be appropriate, during the balance of the plan, the commission may terminate the electric security plan, but not until it shall have provided interested parties with notice and an opportunity to be heard. The commission may impose such conditions on the plan's termination as it considers reasonable and necessary to accommodate the transition from an approved plan to the more advantageous alternative. In the event of an electric security plan's termination pursuant to this division, the commission shall permit the continued deferral and phase?in of any amounts Page 34 961 962 963 964 965 966 967 968 969 970 971 972 973 974 975 976 977 978 979 980 981 982 983 984 985 986 987 988 989 990 991 992 Page35 that occurred prior to that termination and the recovery of those amounts as contemplated under that electric security plan. (F) With regard to the provisions that are included in an electric security plan under this section, the commission shall consider, following the end of each annual period of the plan, if any such adjustments resulted in excessive earnings as measured by whether the earned return on common equity of the electric distribution utility is significantly in excess of the return on common equity :hat was earned during the same period by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. Consideration also shall be given to the capital requirements of future committed investments in this state. The burden of proof for demonstrating that significantly excessive earnings did not occur shall be on the electric distribution utility. If the commission finds that such adjustments, in the aggregate, did result in significantly excessive earnings, it shall require the electric distribution utility to return to consumers the amount of the excess by prospective adjustments; provided that, upon making such prospective adjustments, the electric distribution utility shall have the right to terminate the plan and immediately file an application pursuant to section 4928.142 of the Revised Code. Upon termination of a plan under this division, rates shall be set on the same basis as specified in division of this section, and the commission shall permit the continued deferral and phase?in of any amounts that occurred prior to that termination and the recovery of those amounts as contemplated under that electric security plan. In making its determination of significantly excessive earnings under this division, the commission shall not consider, directly or indirectly, the 993 994 995 996 997 998 999 1000 1001 1002 1003 1004 1005 1006 1007 1008 1009 1010 1011 1012 1013 1014 1015 1016 1017 1018 1019 1020 1021 1022 1023 Page36 !_132_1270?6 revenue, expenses, or earnings of any affiliate or parent company. Sec. 4928.147. (A) In establishing a nonbvpassable rate mechanism.for recoverv of national securitv generation resource net impacts under division of section 4928.142 or division of section 4928.143 of the Revised Code, the public utilities commission shall do the following: (1) Determine, everv three vears, the prudence and reasonableness of the electric distribution utilitv?s actions related to the national securitv generation resource, including its decisions related to offering the contractual commitment into the wholesale markets; (2) Determine the proper rate design for recovering or remitting the national security generation resource net impact, provided, however, that the charge or credit recovering such impact, includind anv deferrals or credits, shall not exceed two dollars and fiftv cents per customer per month for residential customers and two thousand five hundred dollars per customer per month for all other customers, with the commission establishing comparable caps for each nonresidential customer class at or below the two thousand five hundred dollar per customer level. Insofar as the national securitv generation resource net impact exceeds these limits, the electric distribution utilitv shall defer the remaining net impact as a regulatorv asset or liabilitv that shall be recovered as determined bv the commission subiect to the rate caps set forth herein. (3) Provide for discontinuation, subiect to final reconciliation, of the nonbvpassable recovery mechanism on December 31, 2030, unless such mechanism is extended pursuant to 1024 1025 1026 1027 1028 1029 1030 1031 1032 1033 1034 1035 1036 1037 1038 1039 1040 1041 1042 1043 1044 1045 1046 1047 1048 l049 1050 1051 1052 1053 Pages? division (B) of this section. (B) The commission shall conduct an inquiry in 2029 to determine whether it is in the public interest to continue recovery of national securitv generation resource net impacts after 2030, and report its findings to the qeneral assembly. Section 2. That existing sections 4928.01, 4928.02, 4928.141, 4928.142, and 4928.143 of the Revised Code are hereby repealed. Section 3. The items of law contained in division (B) of section 4928.141 of the Revised Code, and their applications, are severable. If any item of law contained in that division, or if any application of any item.of law contained in that division, is held invalid, the invalidity does not affect other items of law contained in this act and their applications that can be given effect without the invalid item_of law or application. 1054 1055 1056 1057 1058 1059 1060 1061 1062 1063 1064 1065 1066 1067 1068 1069 Snider, Grace From: Snider, Grace Sent: Friday, June 16, 2017 4:23 PM To: Stepp, Taylor Subject: . FW: press response From: Lehman, Ryan Sent: Friday, June 16, 2017 4:16 PM To: Snider, Grace Subject: Re: press response Hold off unless you need to. Call my celi from here on out. 740.407.2730 Sent from my Verizon 4G LTE Smartphone Original From: Snider, Grace Date: Fri, Jun 16, 2017 12:38 PM To: Lehman, Ryan; Cc: SubjectRe: press response Sorry I missed your call. Have not responded yet, was waiting for any additions or deietions from you On Jun 15, 2017, at 8:28 PM, Lehman, Ryan wrote: race, I tried reaching out to you today. Did you end up responding? Ryan J. Lehman Majority of icy Adviser Of?ce of Speaker Clifford A. Rosenberger Ohio House of Representatives Ivanlehman?ibohiohouseeov (614) 466-6505 From: Snider, Grace Sent: Thursday, June 15, 2017 11:34 AM To: Lehman, Ryan Subject: press response Here is the emaii i referenced on the anything else you?d add to response? From: Miller, Brad Sent: Wednesday, June 14, 2017 4:48 PM To: Stepp, Taylor Subject: press response Hi Taylor, I?ve drafted the following ?take a look and see what you think. Basically, because the reporter?s question is so broad, I think we can just refer him to the sponsor testimony and see where that leads. But I?m certainly open to other suggestions as well. As with many legislative proposals, we felt it was important to bring this issue before the General Assembly and work with our colleagues to see what kinds of ideas, solutions and concerns they had on the topic. The committee process has been extremely useful and beneficial for that purpose by providing a forum for all sides to present their positions. i believe the Sponsor testimony presented before the House Public Utilities Committee outlines the key arguments and overarching rationale for why I decided to joint?sponsor House Bill 239. i have attached that documen for your reference. CH TESTIMONY TO There are a couple details from that testimony that i would like to specifically point out: This legislation seeks to provide recovery of pruden tly incurred costs only; there is no return componen for the investor-owned utilities built into the costs. a OVEC?related cost recovery will not impact the wholesale competitive markets, nor will it affect customers? rights to shop for a retail energy supplier of their choice. 0 OTHER YOU WOULD TO Thanks, Brad Miller Deputy Communications Director Press Secretary O?ice of Speaker Clifford Rosenberger Ohio House of Representatives (614) 466?8759 Snider, Grace From: Stepp, Taylor Sent: Wednesday, June 14, 2017 4:50 PM To: Snider, Grace Subject: FW: press response Taylor Stepp Legislative Aide Office of Chairman Ryan Smith 77 South High Street, 13th Floor (614) 466?1366 From: Miller, Brad Sent: Wednesday, June 14, 2017 4:48 PM To: Stepp, Taylor Subject: press response Hi Taylor, I?ve drafted the following ?take a look and see what you think. Basically, because the reporter?s question is so broad, I think we can just refer him to the sponsor testimony and see where that leads. But i?m certainly open to other suggestions as well. As with many legislative prOposals, we felt it was important to bring this issue before the General Assembly and work with our colleagues to see what kinds of ideas, solutions and concerns they had on the topic. The committee process has been extremely useful and beneficial for that purpose by providing a forum for all sides to present their positions. i believe the sponsor testimony i presented before the House Public Utilities Committee outlines the key arguments and overarching rationale for why I decided to join t-sponsor House Bill 239. i have attached that document for your reference. TTACH TO There are a couple details from that testimony that would like to specifically point out: This legislation seeks to provide recovery of prudently incurred costs only, there is no return componen for the investor?owned utilities built into the costs. 0 OVEC?related cost recovery will not impact the wholesale competitive markets, nor will it affect customers? rights to shop for a retail energy supplier of their choice. 0 OTHER DETAILS YOU WOULD TO Thanks Brad Miller Deputy Communications Director Press Secretary O??ice of Speaker Clifford Rosenberger Ohio House of Representatives (614) 466?875 9 Snider, Grace From: Miller, Brad Sent: Wednesday, June 14, 2017 4:48 PM To: Stepp, Taylor Subject: press response Hi Taylor, l?ye drafted the following ?take a look and see what you think. Basically, because the reporter?s question is so broad, I think we can just refer him to the sponsor testimony and see where that leads. But i?m certainly open to other suggestions as well. As with many legislative proposals, we felt it was important to bring this issue before the General Assembly and work with our colleagues to see what kinds of ideas, solutions and concerns they had on the topic. The committee process has been extremely useful and beneficial for that purpose by providing a forum for all sides to present their positions. i believe the sponsor testimony presented before the House Public Utilities Committee outlines the key arguments and overarching rationale for wh i decided to joint?sponsor House Bill 239. i have attached that document for your reference. TO There are a couple details from that testimony that i would like to specifically point out: a This legislation seeks to provide recovery of prudently incurred costs only; there is no return component for the in vestor?owned utilities built into the costs. a OVEC?related cost recovery will not impact the wholesale competitive markets, nor will it affect customers? rights to shop for a retail energy supplier of their choice. 0 OTHER DETAILS YOU WOULD TO Thanks, Brad Miller . Deputy Communications Director Press Secretary Of?ce of Speaker Clifford Rosenberger Ohio House of Representatives (614) 466-8759 Snider, Grace From: Sent: To: Cc: Subject: Attachments: Ryan Smith Tuesday, June 13, 2017 9:28 AM Smith, Ryan Snider, Grace; Stepp, Tayior OMA letter on OVEC OVEC Bailout White Paper 6.7.17.pdf; Utilities Seek Another Bailout, This Time for Obsolete ?National Defense? Assets Legisiation was recently introduced in the Ohio General Assembly that would allow Ohio?s investor?owned electric utilities (utilities) or their af?liates, who are part owners of the Ohio Valley Electric Corporation (OVEC) power plants, to collect from customers unwarranted subsidies to support the uneconomic power plants in which the utilities or their af?liates have an ownership stake, including an OVEC plant located in lndiana. The legislation would guarantee utilities recovery of all costs associated with the OVEC plants, including deferred costs. The legislation authorizes the utilities to collect these charges from all electricity users in Ohio under certain circumstances, which would remain in place until the assets are retired. The utilities? rationale for the necessity of this request is a red herring. The OVEC plants are no different than any other electricity generation resource currently bidding into the wholesale market against other generation resources. What is different is that the OVEC plants are inefficient, produce expensive power and cannot get a foothold in the market. The utilities want the Ohio General Assembly to provide subsidies so they can ignore the market, keep the plants open, have Ohioans purchase power from the plants and pay prices that are higher than for other sources of electricity, and avoid having to write down the vaiue of these plants - as they should have done years ago. If approved, this would not be the utilities? first consumer-paid subsidy. Ohio?s investor~ owned utilities received $9.2 billion in ?stranded assets" and ?regulatory transition? payments from 2000 to 2010. Despite collecting these payments, utilities failed to write down their noncompetitive generating plants including OVEC which are the assets that were ?stranded.? Now the utilities want more. This is utility regulation right out of the pages of Laura Numeroff?s children?s book If You Give A Mouse A Cookie, the classic tale of a mouse that gets the cookie it asks for, but always wants more. From 2000 to 2017, the utilities received $15.7 billion of cookies and are now asking for what some have estimated to be an additional $300 million per year for the life of the plants. Another source, the Ohio Legislative Service Commission (LSC), has estimated the costs paid by consumers to be potentially as high as $256.6 million per year for the 24-year period of the current OVEC contract. . Clearly, it?s time to put a lid on the cookiejar. Ohio ratepayers should not be required to support uneconomic power plants operating at barely half?capacity, such as the OVEC plants. Requiring customers in Ohio to pick up this tab would increase operating costs for Ohio?s businesses and disadvantage these businesses compared to businesses in competing states with lower electricity costs. The subsidy would be levied on a significant segment of the population, including customers in Dayton Power Light, Duke Energy Ohio and FirstEnergy service territories. The Ohio Manufacturers: Association June 7, 2017 1 Background The Ohio Valley Electric Corporation is a companyjointly owned by several electric utilities.1 OVEC and its wholly owned subsidiary, lndiana~Kentucky Electric Corporation, own and operate two electricity generating complexes: Kyger Creek Power Plant, near Gallipolis, Ohio, and Clifty Creek Power Plant, near Madison, Indiana. Ohio?s Kyger Creek complex has ?ve electricity generating units, and Indiana?s complex has six generating units. According to website, OVEC was formed in the early 19503 by investor?owned utilities to generate electricity to meet the substantial electric power requirements of the uranium enrichment facilities then under construction by the Atomic Energy Commission (AEC) just south of Piketon, Ohio. Piketon?s Portsmouth Gaseous Diffusion Plant was built from 1952 to 1956 and was one of the three large gaseous diffusion plants2 constructed to produce enriched uranium to support the nation?s nuclear weapons program and the US. Navy. For a short period of time much later, the Piketon plant produced enriched uranium for commercial nuclear reactors. In October 1952, OVEC and the AEC entered into a 25?year power purchase agreement to ensure the availability of electricity to meet the needs of the Piketon plant. The agreement ,3 provided for excess generating capacity from OVEC generation not needed by Piketon) to be available to the OVEC utility owners. The agreement was later extended through 2005. i However, with the Cold War ending in the early 1990s, the demand for enriched uranium for national defense purposes dropped. in September 2000, the US. Department of Energy (DOE) notified OVEC that the power purchase agreement with Piketon was being canceled. In May 2001, the Piketon plant ceased operations, with the remaining work going to Paducah, Kentucky, and Piketon relegated to ?cold?standby? status. In 2003, the power agreement between OVEC and Piketon was terminated. Piketon's status was clarified in 2006 when the plant?s status shifted from ?cold?standby? to ?cold?shutdown.? In May 2011, the power agreement between OVEC and Piketon was amended to make entire generating capacity available to the utility owners to supply other customers. The current power agreement extends to June 30, 2040. Today, the Piketon plant remains shut down and is preparing for decontamination and decommissioning. The timing is critical. As far back as 2000 (prior to the implementation of electricity deregulation in Ohio), the utilities knew that Kyger Creek and Clifty Creek Power Plants Wauld no longer be used or needed to serve the demands of national defense. What would the legislation do? Essentially, what?s being proposed is a new utility giveaway bill that would bail out OVEC based on the pretense of OVEC being a ?national security asset? because it initially was created, in part, to provide electricity needed to produce enriched uranium to support the nation?s nuclear weapons program. 1 Key provisions of the legislation include the following: 1American Electric Power, Dayton Power Light, Duke Energy Ohio and FirstEnergy Solutions all have equity stakes in OVEC. 2The other gaseous diffusion plants were in Paducah, Kentucky and Oak Ridge, Tennessee. The Ohio Manufacturers Association - June 7, 2017 2 Changes state policy to recognize OVEC resources as "national security generation" and preserves ongoing, yet unspecified, benefits associated with such resources. Guarantees cost recovery of all costs associated with OVEC, including deferred costs, which could potentially be substantial since the OVEC power plants are currently operating at partial load, they aren?t efficient and they are likely losing money. Allows the PUCO no discretion under the bill, the Commission must approve recovery for all costs. Approves cost recovery from customers of the utilities of all costs even if the OVEC ownership share is owned by an unregulated affiliate. The bill is silent as to how the affiliate will obtain the revenue from the utility to support its ownership share of OVEC. May allow a utility to serve its Standard Service Offer (880) with OVEC power Requires the Standard Service Offer (880) to include OVEC cost recovery. Allows a utility with an af?liate to use the affiliate?owned power to serve the utility's SSO - regardless of its price, regardless of the management practices of the operating utility, regardless of how it will affect regional markets for electricity generation, regardless whether an unregulated affiliate owns the share of OVEC, and regardless of whether the power is being produced from the Ohio?sited plant. Allows a utility to reopen and revise its current ESP to potentially collect more costs, even though the utility may already be receiving subsidies for OVEC. ifthe OVEC power is sold in the wholesale markets and revenues are credited to offset the costs to customers, the cost recovery rider will be non-bypassable. Although not stated, this implies that if OVEC power is used to supply the 880, the cost recovery rider wilt be bypassable. If the proposed legislation becomes law, and therefore, OVEC is getting full cost recovery for its operations, there would be no incentive for OVEC to operate more efficiently or compete on price in the wholesale market. Whats wrong with this ,eteter?e? The utilities and their af?liates want a subsidy tooperate and maintain the OVEC power plants. They want Ohio customers, both businesses and individuals, to bail them out and support uneconomic power plants that are no longer used to support, or otherwise related to, national defense. These requests are unreasonable and unwarranted for a variety of reasons: Piketon no longer processes nuciear fuel for weapons, and hasn?t for many years. it thus is not a national security asset. Such a claim is nothing more than ?a rhetoricai port in a financial storm.? The utilities knew the risk of supplying Piketon from 2001 to 2006, and the closure of the defense facility should have been factored into the utilities? business decisions. The Piketon nuclear enrichment site was opened in 1952 and closed on September 30, 2006. The utilities were notified in 2000 that the contract with Piketon would be canceled. The contract terminated in 2003. The utilities have already been paid transition revenues to help transition to a fully competitive generation market. The Ohio Manufacturers Association - June 7, 2017 3 In other words, the utilities knew the risk involved, took money to offset the costs of stranded assets, and are now asking to be compensated for their bad debt. in 2016, Kyger Creek?s annual output was 52 percent, while Clifty Creek?s annual output was 44 percent. These two plants basically were running at, or less than half of, full load. Ifthe utilities are pursuing a nationai defense rationale to offset their losses in the OVEC plants, the solution should be reached at the nationat level - the costs should be spread over the entire population. capacity is 12.1 percent (or 289.9 MW) more than peak usage at Piketon. The additional 289.9 MW was built to service customers beyond Piketon and has continued to serve other customers after the closure of Piketon. This belies the argument that OVEC was built solely for national security purposes. And this is not a trivial amount it?s the equivalent of one generating unit. Under no circumstances should Ohio electricity users subsidize out~of~state power plants. Piketon?s peak usage (before 2001) was 2,100 MW. Total OVEC capacity is 2,390 MW. Ohio?located Kryger Creek is 45.4 percent of OVEC capacity, and Indiana? located Clifty Creek is 54.5 percent of OVEC capacity. So, if the proposed subsidy i_s awarded to the utilities, the maximum subsidy should be based on 45.4 percent of 2,100 MW Kyger Creek?s share of peak usage), not 100 percent of total capacity. No matter how you cut it, the legislative proposal is a subsidy for uncompetitive power. Subsidizing power produced with old, inefficient technologies should not be allowed. What attematfves are there for addressing the problem? Following are two ideas for resolving OVEC without rewarding OVEC's utility owners (using Kyger Creek as the example): 1. Preferred approach. Provide no subsidy and allow the markets to work. Allow the owners to decide whether to continue operating the OVEC units and sell the power into the wholesale market or sell the plants to a new owner at market value. Alternative approach. It the owners cannot sell the plants, and the owners deem the plants to be unprofitable or uneconomic, and the owners decide to close the plants, the owners could seek assistance from the State of Ohio. The state could assist in the closure of the plants by forming a nonprofit Kyger Creek Decommissioning Corporation that could float bonds secured by a non?bypassable rider across Ohio ratepayers. This would be done only after OVEC turns over the title to the generating units free and clear for $1 to the Decommissioning Corporation. The transfer of assets must include on-site transmission equipment and connections. The site would then be owned free and clear by the Decommissioning Corporation, which could sell or lease the land for economic development purposes. Proceeds from the sale or lease of the site would be used to accelerate payment of the Decommissioning bonds. This alternative approach calls to mind the Troubled Asset Relief Program (TARP), which was signed into law in October 2008. TARP provided a vehicle for the US. Department of the Treasury to purchase toxic assets and equity from trouble ?nancial institutions to strengthen the nation's financial sector. It was a key component of the government?s actions to address the subprime mortgage crisis. The Ohio Manufacturers Association - June 7, 2017 4 Waive seen this movie before The OVEC bailout proposal is the utilities? third attempt at forcing Ohioans to purchase above? market electricity. From 2014 through 2015 two utilities created regulatory mandated power purchase agreements to force Ohioans to consume power from their loss?making coal ?red plants first. This included the OVEC plants. The PUCO agreed, but the Federal Energy Regulatory Commission stopped in its tracks this blatant attempt to re?monopolize the electricity generating market. This year witnessed FirstEnergy?s attempt to have Ohioans purchase expensive nuclear power first, with the prospect of Ohio electricity users being forced to bail out FirstEnergy?s plant in along with its two northern Ohio nuclear plants. That proposal is still in play. Now we have a proposal that could funnel upwards of $300 miilion more per year, indefinitely, to the owners of both the Ohio and Indiana OVEC plants. the esteem tine? There is no compelling argument for having Ohio ratepayers, electricity customers, pay for uneconomic generation assets. Ohio should n_ot reward utility owners with the subsidies they seek for several reasons: - Under Ohio law, utilities are not allowed to own and operate generation assets. . Utilities had multiple decades to write down the value of their OVEC plants. . have already collected stranded costs associated with their OVEC generation assets. 0 Utilities should not be rewarded for their bad business decisions. . More than half (54.5 percent) of the OVEC assets are in Indiana. Ohio consumers should not be required to subsidize Clifty Creek in Indiana. . Utilities should not be permitted to impose on customers even more above~market charges. The mouse has consumed enough cookies. The Ohio Manufacturers: Association - June 7, 2017 5 Snider, Grace From: Schwartz, Patrick Sent: Monday, June 05, 2017 12:25 PM To: Smith, Ryan Cc: Snider, Grace; Stepp, Taylor Subject: FW: OVEC Attachments: issues and Follow?up Something to look over in preparation for Wednesday?s meeting From: Koppitch, Matthew Sent: Monday, June 05,2017 12:02 PM To: Schwartz, Patrick Subject: OVEC Patrick, Thanks again as always for your assistance. As I mentioned on the phone, I am attaching a document that is our analysis of the impact of the OVEC legislation as introduced. We wanted to get this to Chairman Smith before sharing it with anyone else so that he can review. We will be doing the same for Rep. Carfagna. As he looks it over, we would be open to discussing the memo via phone call or in person and working through his questions or comments on our observations at his convenience. This would be just with the team here at Bricker and is independent of the meeting with our client that we have scheduied later this week. a eta-1 at we; Matthew R. Koppitch Bricker Eckler LLP 100 South Third Street 1 Columbus, OH 43215 Direct Dial 614.227.3824 mkoppitch@bricker.com v-?card This electronic transmission contains information from the law ?rm of Bricker 8; Eckler LLP which is privileged, confidential or otherwise the exclusive property of the intended recipient or Bricker 8L Eckler LLP. This information is intended for the use of the individual or entity that is the intended recipient. If you have received this electronic transmission in error, please notify us by telephone at 614?227?8899, or by electronic maii at webmasterQbrickercom. Please destroy the original transmission. Thank you for your assistance. OVEC Legislation H.B. 239 81. 5.3. 155 I. Issues 1) Recovery of ?All Costs.? The .legislation?s language permits the recovery of ?all costs.? This is unacceptably broad. 2) OVEC Ownership Needs Support for Large Debt Burden. According to 2016 Financial Statements,1 OVEC has over $1.4 billion of debt, with over $1.1 billion in long~term debt.2 This appears to be the main problem in is extremely overleveraged. in 2017, OVEC will have $248 million of debt maturities, and then $151 million and $154 million in 2018 and 2019, respectively.3 a. in 2016, operating revenues were $586 million and operating expenses were $516 million, leaving OVEC with $70 million in operating income. With other income, OVEC had $74 million in 2016 income before debt interest charges. However, 2016 interest charges were $73 million, leaving OVEC with less than $1 million in 2016 Income. 3) Joint and Several Liability of Ownership. It is unclear whether the ownership agreement requires the owners to be jointly and severally liable to each other in the event that one or more of the owners-is unable to meet its obligations. If the owners are jointly and severally liable, then they are liable for the others? obligations. This issue is not hypothetical, as FirstEnergy Solutions? potential bankruptcy could require other OVEC owners, including other Ohio utilities, to take its share of OVEC obligations, including a share of the debt obligations. Also, is the debt obligation of OVEC non?recourse to OVEC-only, or are owners also liable for their pro-rata share of the debt if OVEC fails? 4) Bypassability vs. Non?bypassability. The legislation appears to give the IOUs two avenues to cover their OVEC obligations: 1) serve their 550 load; or 2) sell the OVEC obligation into the wholesale market and recover the difference between revenues and costs through a nonbypassable rider. The first scenario would allow customers to bypass the increased charges from OVEC by leaving the 550. In the second scenario, all customers would pay the related costs. The legislation is not clear as to when either scenario may apply. This has serious implications as to whether the OVEC costs are paid only by the 880 customers or whether they are bypassable if the customer shops for its own power. 1 OVEC 2016 Consolidated Financials, at Consolidated 2 OVEC 2016 Consolidated Financials, pp. 3?4. 3 OVEC 2016 Consolidated Financials, p. 16. 11749796v1 5) Potential Out of State Subsidy: The legislation states that ?All electric distribution utilities in the same holding company system may jointly use the output of the affiliate?s contractual commitment in their standard service offer.? The legislation does not clarify that the affiliate must be an Ohio-based affiliate. This language could allow an to take on the OVEC obligation of an out~of?state affiliate that is part of the same holding company. a. The impact of this wouid be significant. If the Ohio lOUs? non?Ohio affiliates are included, the vast majority of the OVEC obligations would fail on Ohio ratepayers. 6) Length of Recovery. The lnter~Company Power Agreement which binds the Ohio IOUS and is the purported basis for the need for legislation, does not expire until 2040. During that time, coal?s competitive position will likely continue to decrease. Because ?all costs? may be recovered, there is incentive to make continual upgrades to the OVEC facilities to keep them operational. These upgrades wili likely become more costly over time to keep facilities already over 60 years old, open long. Ohio consumers will be responsible for covering these increased costs. 7) Recovery of ?deferred costs.? The legislation is unclear what may be permitted under "deferred costs.? OVEC has significant debt burdens and has also made significant recent investment, such as new scrubbers in 2013. Under traditional utility regulation principles, ?deferred costs? are treated as regulatory assets, which are entitled to earn a rate of return. In 2016, OVEC had over $122 million in ?deferred charges.?4 8) Above~Market Costs: In 2016, the OVEC sales for resale to the Ohio utilities totaled 3,715,449 According to the OVEC 2015 Annual Report, cost were approximately $64 per As a result, the total cost of the OVEC sales to the Ohio utilities was $237,788,736. if those were sold in the PJM market, they would get approximately $36 or $133,756,164 million in revenue from sates in the market. To make up the difference, Ohio ratepayers wouid pay $104,032,572. a. if the utilities sell their OVEC obligations to their SSO ioad (non?shopping customers), that limited pool of customers will experience a significant increase. Currently, the utilities procure the supply to serve their 550 load through auctions. For example, in the most recent auction for AEP Ohio, the auction resulted in an average 550 price of S46 much lower than the $64 amount. This could increase the $50 price considerably. b. If OVEC receives cost recovery, then there is incentive for the OVEC facilities to produce more Mth. For instance, in 2011, before the substantial increase of cheap produced by new combined cycie natural gas OVEC had a power use factor of about 90%. In 2015, power use factor was 73%. Due to the unfavorable economics in recent years, the OVEC facilities have decreased output. if costs are to be recovered, there will be incentive to increase output because the economics of increasing output will no longer matter. 4 OVEC 2016 Consolidated Financials, p. 3. 11749796v1 ll. Documents and Information Needed from the Utilities There has not been transparency by the utilities to the Legislature in making its OVEC books and records open and available to review before the Legislature grants the rate relief being sought. The following documents and information is necessary for review: 1) A copy of the which is the governing document for the ownership group. The utilities have argued that legislation is needed because this agreement does not allow them to exit. The legislature should have the opportunity to review this agreement. A copy of the operating agreement for the OVEC facilities. Documents outlining the decision?making process of the ownership group in the early 20005 to keep the units in the market after the 50 years of PPA from the federal government expired (2003). Presumably, since decisions under the ICPA must be made unanimously, the Ohio utilities decided to place the OVEC units in the market. Documents outlining the decision to invest in additional environmental upgrades to the facility over the last 5 years, thereby extending the life of the OVEC facility. Were the Ohio utilities supportive of that decision? The Ohio utilities indicated that they tried to get out of the OVEC contract but were unable to get agreement. They should provide details about those attempts, such as when they tried, how often they tried, and which owner-entities objected. The Ohio utilities should indicate whether they will support continued investment in the OVEC facility in order to extend the life of the facilities. Ill. Alternative Legislative Proposal As an alternative to address the utilities? point that because unanimous agreement of all OVEC owners is required, instead of granting rate relief, the Legislature could provide a way to allow Ohio utilities to divest their ownership without this impediment through a PUCO approved process, as follows: 4905.48 (E) An EDU owning an interest in a national security generation resource that wishes to transfer such interest shall apply to the PUCO for approval of the transfer. The PUCO shall approve such transfer upon a showing by the EDU of the financial capability of the transferee. An order of the PUCO approving such transfer shall constitute all of the necessary approvals under state law for 11749796v1 such transfer, and the EDU shall not be required to obtain any approval from any other interest owner in the national security generation resource to effectuate such transfer. 11749796V1 Snider, Grace From: Stepp, Tayior Sent: Thursday, May 25, 2017 9:02 AM To: 'RMitchel@ovec.com? Subject: RE: Followuup That is very generous, thank you for reaching out. We will be in touch ifthat would be helpful. Thank you for the work you do locally to keep the lights on for us, Taylor Stepp Legislative Aide Office of Chairman Ryan Smith 77 South High Street, 13m Floor {614) 466-1366 From: RMitchel@ovec.com Sent: Thursday, May 25, 2017 9:00 AM To: Stepp, Taylor Subject: Re: Followeup OK, Thanks, We just want to let Rep. Smith know he has our full support on this bill, and we would be glad to help however we can. if needed, can contact the Ohio AFL-CIO and other Labor Union leaders and ask for their support and to contact their local State Reps. regarding this issue. Thanks again, Jake Mitchell From: ?TaylorSteppCoDohiohouseoov" To: , Date: 05941201? 04:34 PM Subject: Follow-up Mr. Mitchell, was forwarded your email by another office asking to touch base with Rep. Smith. The bill i think you?re referring to is HB 239 and Rep. Smith is actually the sponsor of that bill. And he supports the measures included to keep Kyger Creek open. Lin to H8 239k: Did you have any questions about Rep. Smith?s sponsorship of the bill or related to the issue? Thanks Taylor Stepp Legislative Aide O?ice of Chairman Ryan Smith 77 South High Street, 13th Floor {614) 466?1366 Snider, Grace From: Stepp, Taylor Sent: Thursday, May 25, 2017 9:01 AM To: Snider, Grace; Schwartz, Patrick Subject: FW: Follow?up FYI Taylor Stepp Legislative Aide O??ice of Chairman Ryan Smith 77 South High Street, 13?? Floor (614) 456-1366 From: RMitchel@ovec.com Sent: Thursday, May 25, 2017 9:00 AM To: Stepp, Taylor Subject: Re: Follow-up OK, Thanks, Wejust want to let Rep. Smith know he has our full support on this bill, and we would be glad to help however we can. if needed, I can contact the Ohio and other Labor Union leaders and ask for their support and to contact their local State Reps. regarding this issue. Thanks again, Jake Mitchell From: "Taylor.Stepp@ohioh0use.q0y? To: Date: 05i'24f2017 04:34 PM Subject: Foilow?up Mr. Mitchell, was forwarded your emai! by another office asking to touch base with Rep. Smith. The bill I think you?re referring to is HB 239 and Rep. Smith is actually the sponsor of that bill. And he supports the measures included to keep Kyger Creek open. Lin to H3 239k: Did you have any questions about Rep. Smith?s sponsorship of the bill or related to the issue? Thanks, Taylor Stepp Legislative Aide Ojj?ice of Chairman Ryan Smith 77 South High Street, 13th Floor (614) 466-1366 Snider, Grace From: RMitchel@ovec.com Sent: Thursday, May 25, 2017 9:00 AM To: Stepp, Taylor Subject: Re: Follow?up OK, Thanks, We just want to let Rep. Smith know he has our fuli support on this bill, and we woutd be glad to help however we can. If needed, I can Contact the Ohio and other Labor Union leaders and ask for their support and to contact their local State Reps. regarding this issue. Thanks again, Jake Mitchell From: "Taylor.Stepp@ohiohouse.gov" To: Date: 05!24f2017 04:34 PM Subject: Fotlow?up Mr. Mitchell, I was forwarded your email by another of?ce asking to touch base with Rep. Smith. The bill I think you?re referring to is HB 239 and Rep. Smith is actuaily the sponsor of that bill. And he supports the measures included to keep Kyger Creek open. Lin to H8 239k: Did you have any questions about Rep. Smith?s sponsorship of the bill or related to the issue? Thanks, Taylor Stapp Legislative Aide O??fce of Chairman Ryan Smith- 77 South High Street, 13th Floor (614) 466-1366 Snider, Grace From: RMitchel@ovec.oom Sent: Thursday, May 25, 2017 8:55 AM To: Stepp, Taylor Subject: Re: Follow-up OK, thank you. We just wanted to let Rep. Smit From: 'Taylor.Stepp@ohiohouse.gov" To: Date: 05(24i2017 04:34 PM Subject: Follow?up Mr. Mitchell, was forwarded your email by another office asking to touch base with Rep. Smith. The bill I think you?re referring to is HB 239 and Rep. Smith is actually the sponsor of that bill. And he supports the measures included to keep Kyger Creek open. Lin to H8 239k: Did you have any questions about Rep. Smith?s sponsorship of the bill or related to the issue? Thanks, Taylor Stepp Legislative Aide Q??ice of Chairman Ryan Smith 77 South High Street, 13th Floor (614) 456-1365 Snider, Grace From: Stepp, Taylor Sent: Thursday, May 25, 2017 5:50 AM To: Snider, Grace Subject: Fwd: House bill to Subsidize the Ohio Valle Electric Corp Sent from my iPhone. Please excuse brevity and errors. Begin forwarded message: From: "Jacob, Abe" Date: May 24, 2017 at 3:13:29 PM EDT To: "Stepp, Taylor" Subject: W: House bill to Subsidize the Ohio Valle Electric Corp Original From: rmitchel?oveccom Sent: Wednesday, May 24, 2017 2:38 PM To: Rep68 Subject: House bill to Subsidize the Ohio Valle Electric Corp First Name Jake Last Name Mitchell Address 9634 Bulaville Pike City Bidwell State OH Zip 45614 Phone 740.645.5988 Email rmitchel@ovec.com Subject House bill toSubsidize the Ohio Valle Electric Corp Message May 24, 2017 My name is Jake Mitchell. I am the President of the Utility Workers Union of America Local Union #430. We represent the employees of the Kyger Creek Power Plant in Gallia County that is owned by the Ohio Valley Electric Corp. We wanted to contact Representative Smith to talk with him about a bill that has been proposed in the Statehouse that would help subsidize our 1 facility. As you may know, the electricity generation industry is a tough market right now. After Ohio de? regulated its electric utilities, many Electric generation companies are having trouble even staying in business. Many plants have closed or are scheduled to be closed. This has put countless peOple out of work. In addition to lost jobs, additional power plant closings could pose a national security risk if the energy grid can not sustain the demand placed on it. This plant is one of the few decent places to work in Southeastern Ohio. There are around 300 full time employees at Ky ger Creek, along with probably another 100 full time contractors. During maintenance outages, up to 500 union tradesmen and women are also employed by construction contractors working at the plant. If this bill is not approved, our facility may be forced to close as well. Along with the lost jobs, the loss in tax revenue to Gallia County would be devastating if this facility were to be closed. We support these subsidies because they will help keep our facility operating and producing electricity for the people of Ohio. We would like to ask you for your support on this issue. Thank you. Sincerely, Jake Mitchell? President UWUA Local #430 740645?5988 nnitchel@ovec.com 9634 Bulaville Pike Bidwell, OH 45614 Snider, Grace From: Stepp, Taylor Sent: Wednesday, May 24, 2017 4:35 PM To: ?rmitchel@oyec.com' Subject: Follow?up Mr. Mitchell, I was forwarded your email by another office asking to touch base with Rep. Smith. The bill I think you?re referring to is HB 239 and Rep. Smith is actually the sponsor of that bill. And he supports the measures included to keep Kyger Creek open. Lin to H8 239k: Did you have any questions about Rep. Smith?s sponsorship of the bill or related to the issue? Thanks, Taylor Stepp Legislative Aide Office of Chairman Ryan Smith 77 South High Street, 13?? Floor (614) 466?1366 Snider, Grace From: Stepp, Taylor Sent: Wednesday, May 24, 2017 4:06 PM To: Jacob, Abe Subject: RE: House bill to Subsidize the Ohio Valle Electric Corp l'll reach out. Thanks man, Taylor Stepp Legislative Aide Office of Chairman Ryan Smith 77 South High Street, 13th Floor (614) 466-1366 ~~e~~Origina From: Jacob, Abe Sent: Wednesday, May 24, 2017 3:13 PM To: Stepp, Taylor Subject: FW: House bill to Subsidize the Ohio Valle Electric Corp Original From: rmitchel@oyec.com Sent: Wednesday, May 24, 2017 2:38 PM To: Rep68 Subject: House bill to Subsidize the Ohio Valle Electric Corp First Name :lake Last Name Mitchell Address 9634 Bulaville Pike City Bidwell State OH Zip 45614 Phone 740.545.5988 Email: Subject House bill to Subsidize the Ohio Valle Electric Corp Message May 24, 2017 My name is Jake Mitchell. lam the President of the Utility Workers Union of America Local Union #430. We represent the employees of the Kyger Creek Power Plant in Gallia County that is owned by the Ohio Valley Electric Corp. We wanted to contact Representative Smith to talk with him about a bill that has been proposed in the Statehouse that would help subsidize our facility. As you may know, the electricity generation industry is a tough market right now. After Ohio dewregulated its electric utilities, many Electric generation companies are having trouble even staying in business. Many plants have closed or are scheduled to be closed. This has put countless people out of work. in addition to lost jobs, additional power plant closings could pose a national security risk if the energy grid can not sustain the demand placed on it. This plant is one of the few decent places to work in Southeastern Ohio. There are around 300 full time employees at Kyger Creek, along with probably another 100 full time contractors. During maintenance outages, up to 500 union tradesmen and women are also employed by construction contractors working at the plant. if this bill is not approved, our facility may be forced to close as well. Along with the lostjobs, the loss in tax revenue to Gallia County would be devastating if this facility were to be closed. We support these subsidies because they will help keep our facility operating and producing electricity for the people of Ohio. We would like to ask you for your support on this issue. Thank you. Sincerely, Jake Mitchell? President UWUA Local #430 740?645-5988 rrnitchel@ovec.com 9634 Bulaville Pike Bidwell, OH 45614 Snider, Grace From: Jacob, Abe Sent: Wednesday, May 24, 2017 3:13 PM To: Stepp, Taylor Subject: FW: House bill to Subsidize the Ohio Valle Electric Corp -??--Original Message From: rmitchel@ovec.com [mailtozrmitchei@ovec.com] Sent: Wednesday, May 24, 2017 2:38 PM To: Rep68 Subject: House bill to Subsidize the Ohio Valle Electric Corp First Name :Jake Last Name Mitchell Address 9634 Bulaville Pike City: Bidwell State 0H Zip 45614 Phone 740.645.5988 Email rmitchel@ovec.com Subject House bill to Subsidize the Ohio Valle Electric Corp Message May 24, 2017 My name is Jake Mitchell. I am the President of the Utility Workers Union of America Local Union #430. We represent the employees of the Kyger Creek Power Pia nt in Gallia County that is owned by the Ohio Valley Electric Corp. We wanted to contact Representative Smith to talk with him about a bill that has been proposed in the Statehouse that would help subsidize our facility. As you may know, the electricity generation industry is a tough market right now. After Ohio deregulated its electric utilities, many Electric generation companies are having trouble even staying in business. Many plants have closed or are scheduled to be closed. This has put countless peopie out of work. in addition to lost jobs, additional power plant closings could pose a national security risk if the energy grid can not sustain the demand placed on it. This plant is one of the few decent places to work in Southeastern Ohio. There are around 300 full time employees at Kyger Creek, along with probably another 100 full time contractors. During maintenance outages, up to 500 union tradesmen and women are also employed by construction contractors working at the plant. it this bill is not approved, our facility may be forced to close as well. Along with the lost jobs, the loss in tax revenue to Gallia County would be devastating if this facility were to be closed. We support these subsidies because they will help keep our facility operating and producing electricity for the people of Ohio. We would like to ask you for your support on this issue. Thank you. Sincerely, Jake Mitcheil? President UWUA Local #430 740?645?5988 rmitchel@ovec.com 9634 Bulaville Pike Bidweli, OH 45614 Snider, Grace From: Stepp, Taylor Sent: Monday, May 22, 2017 12:57 PM To: krsmith223@gmaii.com; Smith, Ryan; Snider, Grace Subject: FW: AEP Ohio OVEC Rider Attachments: OVEC Rider Summarydoc; CSP Typical Bills Current OVEC PPA Riderpdf; Copy of CSP Typical Bills futurepdf ibeiieye this is the email you are referring to. Taylor Stepp Legislative Aide Office of Chairman Ryan Smith 77 South High Street, 13th Floor (614) 466-1366 From: Christine Wright Sent: Tuesday, May 16, 2017 1:11 PM To: Snider, Grace Stepp, Taylor Jacob, Abe Subject: AEP Ohio OVEC Rider All Attached is a summary document of the current AEP Ohio OVEC Rider that was approved by the PUCO last year. Also attached are current and future projected rider costs by customer class. Please let me know if you have any questions or would like additional details. Thank you, Chrisy Summary of Power Purchase Agreement Rider The Power Purchase agreement was approved as a nonubypassable charge. The rider is updated quarterly The current rider includes deferred costs from June 2016 through December 2016 that are being collected over a 12 month period ending December 2017 At the expiration of the deferred costs, the rider will only contain the quarterly values (the rider rate wiil decrease) One attachment shows the typical bills for the current PPA rider rate. The second attachment shows the current rate excluding the June 2016 to December 2016 deferred balance to represent the bill impact estimate at the beginning of 2018. The Commission has approved a cap mechanism for the PPA rider to assure that no customer bills will increase by more than 5% due to the PPA rider. Tariff Residential RR1 Annual RR Annual (38?1 68?2 Secondary GS-2 Primary (38-3 Secondary Current Power Purchase Agreement Rider Columbus Southern Power Rate Zone 100 250 500 750 1 ,000 1 ,500 2,000 375 1,000 750 2,000 1 ,500 4,000 6,000 10,000 10,000 14,000 12,500 18,000 15,000 30,000 60,000 100,000 100,000 30,000 50,000 30,000 36,000 60,000 Ohio Power Company Typical Bill Comparison KW. 03030003 150 300 500 1,000 75 75 100 100 150 Current $23.38 $40.12 $68.02 $95.93 $123.81 $179.60 $235.40 51.98 114.69 89.62 215.00 $241.74 $417.48 $740.48 $1,021.30 $1,122.73 $1,403.57 $1,399.69 $1,784.14 $1,828.81 $3,634.24 $7,245.15 $12,059.71 $16,089.70 $2,873.51 $4,266.45 $3,127.08 $3,544.96 $5,723.66 Progosed $23.63 $40.74 $69.27 $97.80 $126.31 $183.35 $240.40 52.53 116.15 90.71 217.92 $244.22 $424.10 $750.41 $1 ,037.86 $1 ,139.29 $1 ,426.75 $1 ,420.39 $1 ,813.94 $1 ,853.65 $3,683.91 $7,344.49 $12,225.28 $16,228.15 $2,923.18 $4,349.24 $3,176.75 $3,604.57 $5,823.00 Page 1 of 2 Difference Difference $0.25 1.1% $0.62 1.6% $1.25 1.8% $1.87 2.0% $2.50 2.0% $3.75 2.1% $5.00 2.1% $0.55 1.1% $1.46 1.3% $1.09 1.2% $2.92 1.4% $2.48 1.0% $6.62 1.6% $9.93 1.3% $16.56 1.6% $16.56 1.5% $23.18 1.7% $20.70 1.5% $29.80 1.7% $24.84 . 1.4% $49.67 1.4% $99.34 1.4% $165.57 1.4% $138.45 0.9% $49.67 1.7% $82.79 1.9% $49.67 1.6% $59.61 1.7% $99.34 1.7% Primary GS-4 Typical biils assume 100% Power Factor Columbus Southern Power Rate Zone 100,000 90,000 120,000 150,000 200,000 150,000 180,000 200,000 325,000 300,000 360,000 400,000 650,000 1 ,500,000 2,500,000 3,250,000 3,000,000 5,000,000 6,500,000 6,000,000 10,000,000 13,000,000 15,000,000 25,000,000- 32,500,000 Ohio Power Company Typical Bill Comparison Current Power Purchase Agreement Rider KW. 150 300 300 300 300 500 500 500 500 1,000 1,000 1,000 1,000 5,000 5,000 5,000 10,000 10,000 10,000 20,000 20,000 20,000 Current $8,509.55 $9,334.58 $11,423.99 $13,513.42 $15,995.80 $15,542.08 $17,531.52 $19,024.45 $27,730.40 $29,320.62 $33,289.89 $35,936.08 $52,474.73 $1 12,947.36 $169,485.56 $21 1,889.20 $218,954.66 $332,031.06 $416,838.36 $430,969.26 $657,122.06 $826,736.66 Progosed $8,575.13 $9,483.59 $11,522.57 $13,761.78 $17,325.94 $15,790.44 $17,929.55 $19,355.50 $28,258.50 $29,735.97 $33,788.31 $36,489.88 $53,374.66 $1 14,644.91 $172,314.81 $215,567.23 $222,349.76 $337,689.56 $424,194.41 $437,759.46 $668,439.06 $841,448.76 50,000 $1,067,013.06 $1,083,988.56 50,000 $1,632,395.06 $1,660,687.56 50,000 $2,056,431.56 $2,093,211.81 Page 2 012 Difference Difference $165.57 2.0% $149.01 1.6% $198.68 1.7% $248.36 1.8% $331.14 2.0% $248.36 1.6% $298.03 1.7% $331 .14 1.7% $538.10 1.9% $415.35 1.4% $498.42 1.5% $553.80 1.5% $899.93 1.7% $1,697.55 1.5% $2,829.25 1.7% $3,578.03 1.7% $3,395.10 1.6% $5,658.50 1.7% $7,356.05 1.8% $6,790.20 1.6% $11,317.00 1.7% $14,712.10 1.8% $16,975.50 1.6% $28,292.50 1.7% $36,780.25 1.8% Tariff Residential RF11 Annual RR Annual Secondary Primary Secondary Future Power Purchase Agreement Rider Columbus Southern Power Rate Zone 100 250 500 750 1 ,000 1 ,500 2,000 375 1,000 750 2,000 1,500 4,000 6,000 10,000 10,000 14,000 12,500 18,000 15,000 30,000 60,000 100,000 100,000 30,000 50,000 30,000 36,000 60,000 Ohio Power Company Typical Bill Comparison KW. 03070000 300 500 1,000 75 75 100 100 150 Current $23.38 $40.12 $68.02 $95.93 $123.81 $179-80 $235.40 51.98 114.69 89.62 215.00 $241.74 $417.48 $740.48 $1,021.30 $1,122.73 $1,403.57 $1,399.69 $1,784.14 $1,828.81 $3,834.24 $7,245.15 $12,059.71 $16,089.70 $2,873.51 $4,266.45 $3,127.08 $3,544.96 $5,723.66 Progosed $23 .56 $40.58 $88.93 $97.30 $125.84 $182.34 $239.08 5236 115.72 90.39 217.05 $243.48 $422.13 $747.45 $1,032.92 $1,134.35 $1,419.83 $1,414.21 $1,805.05 $1,848.23 $3,889.09 $7,314.84 $12,175.86 $16,186.41 $2,908.36 $4,324.53 $3,161 .93 $3,586.77 $5,793.35 Page 1 of 2 Difference Difference $0.18 0.8% $0.46 1.2% $0.91 1.3% $1.37 1.4% $1.83 1.5% $2.74 1.5% $3.66 1 6% $0.38 0.7% $1 .03 0.9% $0.77 0.9% $2.05 1.0% $1.74 0.7% $4.65 1 $6.97 0.$16.26 1.2% $14.52 1.0% $20.91 1.2% $17.42 1.0% $34.85 1.0% $69.69 1.0% $116.15 1.0% $96.71 0.6% $34.85 1.2% $58.08 1.4% $34.85 1.1% $41.81 1.2% $69.69 1.2% Tariff GS-3 Primary (3154 Columbus Southern Power Rate Zone 100,000 90,000 120,000 150,000 200,000 150,000 180,000 200,000 325,000 300,000 360,000 400,000 650,000 1 ,500,000 2,500,000 3,250,000 3,000,000 5,000,000 6,500,000 6,000,000 10,000,000 13,000,000 15,000,000 25,000,000 32,500,000 Ohio Power Company Typical Biil Comparison Future Power Purchase Agreement Rider 150 300 300 300 300 500 500 500 500 1,000 1,000 1,000 1,000 5,000 5,000 5,000 10,000 10,000 10,000 20,000 20,000 20,000 Current $8,509.58 $9,334.58 $11,423.99 $13,513.42 $18,995.80 $15,542.08 $17,831.52 $19,024.48 $27,730.40 $29,320.62 $33,289.89 $35,936.08 $52,474.73 $1 12,947.36 $169,485.56 $21 1,889.20 $218,954.66 $332,031.06 $416,838.36 $430,969.26 $657,122.06 $826,736.66 Pro posed $8,625.71 $9,439.12 $11,563.37 $13,687.65 $17,228.10 $15,716.31 $17,840.59 $19,256.76 $28,107.89 $29,810.75 $33,838.05 $38,322.92 $53,103.35 $1 14,129.21 $171,455.31 $214,449.88 $221,318.36 $335,970.56 $421 ,959.71 $435,696.66 $665,001 .06 $836,979.36 50,000 $1,067,013.06 $1,078,831.56 50,000 $1,632,395.06 $1,652,092.56 50,000 $2,056,431.56 $2,082,038.31 Typical assume 100% Power Factor Page 2 of 2 Difference Difference $1 18.15 1.4% $104.54 1.1 $139.38 1.2% $174.23 1.3% $232.30 1.4% $174.23 1.1% $209.07 1 2% $232.30 1.2% $377.49 1 4% $290.13 1.0% $348.18 1.1% $388.84 1.1% $828.82 1.2% $1,181.85 1.1% $1,989.75 1.2% $2,580.88 1.2% $2,383.70 1-1 $3,939.50 1.2% $5,121.35 12% $4,727.40 1.1 $7,879.00 12% $10,242.70 1.2% $11,818.50 1.1% $19,697.50 1.2% $25,808.75 1.3% Snider, Grace From: Christine Wright Sent: Monday, May 22, 2017 12:20 PM To: Stepp, Taylor; Snider, Grace; Jacob, Abe Subject: draft sponsor testimony Attachments: OVEC Testimonydocx Attached is draft sponsor testimony for the OVEC legislation. It has been signed off on by all four companies. it is drafted as if Rep Smith will be providing the testimony. Please feel free to reach out with any questions you may have. We appreciate your time and effort and look forward to working with you. The you, Chrisy Chairman Seitz, Vice Chair Carfagna, Ranking Member Ashford, and members ofthe Public Utilities Committee, thank you for the opportunity to provide sponsor testimony on House Bill X. This legislation provides a long?term solution for Ohio investor?owned utilities in response to their commitment to the federal government and to a corporation that operates a coal-fired power plant located in my district near Cheshire, Ohio, and a second coal?fired power plant located in Madison, Indiana. These commitments arose because Ohio?s utilities did not hesitate to support national security at a critical time in our nation?s history. Please ailow me to explain In 1952, during the Cold War and atthe time when the federal government needed to deveIOp the nation?s nuclear arms program, the Atomic Energy Commission (AEC) looked to the private sector to fulfill the tremendous electrical needs of an uranium enrichment facility to be located in Piketon, Ohio, just north of Portsmouth. Ten Ohio River Valley area investor-owned utilities, and in subsequent years their successors and affiliates, answered the call and created OVEC. The Ohio Valley Electric Corporation, better known as OVEC, is unique in both its ownership structure and the national security mission for which it was created, but it is also a marvel insofar as what it accomplished. OVEC expeditiously constructed, owned, and operated'two generating stations capable of producing over 2,000 megawatts of electricity to supply dedicated capacity and energy to Portsmouth Gaseous Diffusion Plant in Piketon, Ohio. in addition, the OVEC sponsoring companies agreed to provide additional security to backstop the project including: 6 Providing power to AEC during construction; a Providing power to AEC during maintenance or emergency outages; and, Accepting the incremental power that the AEC and, later the Department of Energy (DOE), did not need at certain times. During the heart ofthe Cold War years all proceeded as planned and OVEC accomplished its mission. Following the nation?s victory over the Soviet Union, things began to change. As the need for electrical power for the enrichment facility declined, output from OVEC plants was diverted to domestic use and, in 2003, the affiliation with the United States Department of Energy (DOE) was terminated. When that happened, ali of the costs associated with OVEC fell on the sponsoring companies. This event was a turning point and key contributor to the problem this legislation seeks to remedy. When OVEC was formed, the sponsoring companies were all vertically integrated entities in regulated states. Over time, the sponsoring companies found themselves no longer identically structured; subject to different regulatory paradigms, different Regional Transmission Organizations (RTOs) or different control area rules; and, driven by different business objectives. Further complicating the situation for Ohio?s utilities is corporate structure, which, owing to the uniqueness of its origin and purpose, was designed such that unanimity is required for all major business decisions, including the transfer of ownership. The interplay of these circumstances results in a disparity in the path to cost recovery for OVEC?sponsoring companies located in regulated states versus those in deregulated states. Stated differently, cost recovery for Ohio?s utilities is much more complex and difficult to acquire than for their counterparts that are located in states like Indiana, Kentucky, and West Virginia, that still regulate electric generation. Within the next 2 years, under the direction of the state through the Public Utilities Commission of Ohio (PUCO), the Ohio utilities that have not done so already will likely have divested all their legacy generation?a?, but for their contractual commitments to OVEC. The uniqueness of the OVEC situation has long been appreciated by the PUCO, which has granted recovery of related costs in some limited cases, for limited periods of time. But, a long?term solution is needed for Ohio?s distribution utilities that have undeniably fulfilled their commitment to national security and the United States government. A couple additional items are important to note about this proposal: a This legislation seeks to provide recovery of prudently incurred costs only; there is no return component for the investor-owned utilities built into the costs. a OVEOrelated cost recovery will not impact the wholesale competitive markets, nor will it affect customers? rights to shop for a retail energy supplier of their choice. The unique mission and circumstances that brought about OVEC, the diSparity in terms of cost recovery, and the lasting effects of obligations that Ohio?s investor~owned utilities quickly accepted and fulfilled deems granting consistent and long?term cost recovery appropriate. This important legislation will provide a much needed remedy to a lingering problem and i hope you will join me in supporting its passage. Thank you for the opportunity to provide Sponsor testimony on House Bill X. I would be happy to answer any questions you may have at this time. Snider, Grace From: Christine Wright Sent: Tuesday, May 15, 2017 1:11 PM To: Snider, Grace; Stepp, Taylor; Jacob, Abe Subject: AEP Ohio OVEC Rider Attachments: OVEC Rider Summarydoc; CSP Typicai Bills Current OVEC PPA Riderpdf; Copy of CSP Typical Bills futurepdf All? Attached is a summary document of the current AEP Ohio OVEC Rider that was approved by the PUCO last year. Also attached are current and future projected rider costs by customer class. Please let me know if you have any questions or would like additional details. Thank you, Chrisy Summary of Power Purchase Agreement Rider The Power Purchase agreement was approved as a non?bypassable charge. The rider is updated quarterly The current rider includes deferred costs from June 2016 through December 2016 that are being collected over a 12 month period ending December 2017 At the expiration of the deferred costs, the rider will only contain the quarterly values (the rider rate will decrease) One attachment shows the typical bills for the current PPA rider rate. The second attachment shows the current rate excluding the June 2016 to December 2016 deferred balance to represent the bill impact estimate at the beginning of 2018. The Commission has approved a cap mechanism for the PPA rider to assure that no customer bills will increase by more than 5% due to the PPA rider. Tariff Residential RR1 Annual RR Annual Secondary GS-2 Primary (383 Secondary Current Power Purchase Agreement Fiider Columbus Southern Power Rate Zone 100 250 500 750 1 ,000 1 ,500 2,000 375 1 ,000 750 2,000 1,500 4,000 6,000 10,000 10,000 14,000 12,500 18,000 15,000 30,000 60,000 100,000 100,000 30,000 50,000 30,000 36,000 60,000 Ohio Power Company Typical Bill Comparison 01030003 150 300 500 1,000 75 75 100 100 150 Current $23.38 $40.12 $88.02 $85.83 $123.81 $17880 $23540 51.98 114.69 89.62 215.00 $241.74 $417.48 $740.48 $1,021.30 $1,122.73 $1,403.57 $1,388.88 $1,784.14 $1,828.81 $3,834.24 $7,245.15 $12,058.71 $16,089.70 $2,873.51 $4,266.45 $3,127.08 $3,544.96 $5,723.66 Proposed $23.63 $40.74 $88.27 $87.80 $128.31 $183.35 $240.40 52.53 116.15 90.71 217.92 $244.22 $424.10 $750.41 $1,037.88 $1,139.29 $1,428.75 $1,420.39 $1,813.84 $1,853.85 $3,883.81 $7,344.48 $12,225.28 $16,228.15 $2,923.18 $4,348.24 $3,178.75 $3,804.57 $5,823.00 Page 1 of 2 Difference Difference $0.25 1.1% $0.82 1.8% $1.25 1.8% $1.87 2.0% $2.50 2.0% $3.75 2.1% $5.00 2.1% $0.55 1.1% $1.48 1.3% $1.08 1.2% $2.82 1.4% $2.48 1.0% $8.82 1.8% $8.83 1.3% $18.58 1.8% $18.58 1.5% $23.18 1.7% $20.70 1.5% $28.80 1.7% $24.84 1.4% $48.87 1.4% $88.34 1.4% $185.57 1.4% $138.45 0.8% $48.87 1.7% $82.78 1.8% $48.87 1.8% $58.81 1.7% $88.34 1.7% Tariff GS-3 Primary GS-4 Typical bills assume 100% Power Factor Columbus Southern Power Rate Zone 100,000 90,000 120,000 150,000 200,000 150,000 180,000 200,000 325,000 300,000 360,000 400,000 650,000 1 ,500,000 2,500,000 3,250,000 3,000,000 5,000,000 6,500,000 6,000,000 10,000,000 13,000,000 15,000,000 25,000,000 32,500,000 Ohio Power Company Typical Bill Comparison Current Power Purchase Agreement Rider 150 300 300 300 300 500 500 500 500 1,000 1,000 1,000 1,000 5,000 5,000 5,000 10,000 10,000 10,000 20,000 20,000 20,000 Current $8,509.56 $9,334.58 $11,423.99 $13,513.42 $16,995.80 $15,542.08 $17,631.52 $19,024.46 $27,730.40 $29,320.62 $33,289.89 $35,936.08 $52,474.73 $1 12,947.36 $169,485.56 $21 1,889.20 $218,954.66 $332,031.06 $416,838.36 $430,969.26 $657,122.06 $826,736.66 50,000 $1,067,013.06 50,000 $1 ,632,395.06 $1,660,687.56 50,000 $2,056,431.56 $2,093,211.81 Progosed $8,675.13 $9,433.59 $11,622.67 $13,761.78 $17,326.94 $15,790.44 $17,929.55 $19,355.60 $28,268.50 $29,735.97 $33,788.31 $36,489.88 $53,374.66 $114,644.91 $172,314.81 $215,567.23 $222,349.76 $337,689.56 $424,194.41 $437,759.46 $668,439.06 $841,448.76 $1,083,988.56 Page 2 of 2 Difference Difference $165.57 2.0% $149.01 1.6% $198.68 1.7% $248.36 1.8% $331.14 2.0% $248.36 1.6% $298.03 1.7% $331 .14 1.7% $538.10 1.9% $415.35 1.4% $498.42 1.5% $553.80 1.5% $899.93 1.7% $1,697.55 1.5% $2,829.25 1.7% $3,678.03 1.7% $3,395.10 1.6% $5,658.50 1.7% $7,356.05 1.8% $6,790.20 1.6% $11,317.00 1.7% $14,712.10 1.8% $16,975.50 16% $28,292.50 1.7% $36,780.25 1.8% Tariff Residential RR1 Annuat RR Annual Secondary (382 Primary Secondary Future Power Purchase Agreement Rider Columbus Southern Power Rate Zone 100 250 500 750 1,000 1,500 2,000 375 1,000 750 2,000 1 ,500 4,000 6,000 10,000 10,000 14,000 12,500 18,000 15,000 30,000 60,000 100,000 100,000 30,000 50,000 30,000 36,000 60,000 Ohio Power Company Typical Bill Comparison 03030000 ,000 75 75 1 00 100 150 Current $23.38 $40.12 $68.02 $95.93 $123.81 $179.60 $235.40 51.98 114.69 89.62 215.00 $241.74 $417.48 $740.48 $1,021.30 $1,122.73 $1,403.57 $1,399.69 $1,784.14 $1,828.81 $3,634.24 $7,245.15 $12,059.71 $16,089.70 $2,873.51 $4,266.45 $3,127.08 $3,544.96 $5,723.66 Progosed $23.56 $40.58 $68.93 $97.30 $125.64 $182.34 $239.06 52.36 115.72 90.39 217.05 $243.48 $422.13 $747.45 $1,032.92 $1,134.35 $1,419.83 $1,414.21 $1,805.05 $1,846.23 $3,669.09 $7,314.84 $12,175.86 $16,186.41 $2,908.36 $4,324.58 $3,161.93 $3,586.77 $5,793.35 Page 1 of 2 Difference Difference $0.18 0.8% $0.46 1.2% $0.91 1.3% $1.37 1.4% $1.83 1.5% $2.74 1.5% $3.66 1.6% $0.38 0.7% $1.03 0.9% $0.77 0.9% $2.05 1.0% $1.74 0.7% $4.65 1.1% $6.97 0.9% $11 .62 1.1% $11 .62 1.0% $16.26 1.2% $14.52 1.0% $20.91 1.2% - $17.42 1.0% $34.85 1.0% $69.69 1.0% $1 16.15 1.0% $96.71 0.6% $34.85 1.2% $58.08 1.4% $34.85 1.1% $41.81 1.2% $69.69 1.2% Tariff GS-3 Primary (3184 Typical biils assume 100% Power Factor Columbus Southern Power Rate Zone 100,000 90,000 120,000 150,000 200,000 150,000 180,000 200,000 325,000 300,000 360,000 400,000 650,000 1 ,500,000 2,500,000 3,250,000 3,000,000 5,000,000 6,500,000 6,000,000 10,000,000 13,000,000 15,000,000 25,000,000 32,500,000 Ohio Power Company Typical Bill Comparison Future Power Purchase Agreement Rider 1 50 300 300 300 300 500 500 500 500 1,000 1,000 1,000 1,000 5,000 5,000 5,000 10,000 10,000 10,000 20,000 20,000 20,000 Current $8,509.56 $9,334.53 $11,423.99 $13,513.42 $16,995.30 $15,542.03 $17,331.52 $19,024.43 $27,730.40 $29,320.62 $33,289.89 $35,936.08 $52,474.73 $1 12,947.36 $169,485.56 $211 ,889.20 $218,954.66 $332,031 .06 $416,838.36 $430,969.26 $657,122.06 $826,736.66 Progosed $3,325.71 $9,439.12 $11,533.37 $13,337.35 $17,223.10 $15,716.31 $17,340.59 $19,253.73 $23,107.39 $29,610.75 $33,638.05 $36,322.92 $53,103.35 $114,129.21 $171,455.31 $214,449.33 $221,313.33 $335,970.53 $421,959.71 $435,393.33 $635,001.06 $333,979.33 50,000 $1,067,013.06 $1,078,831.56 50,000 $1 ,632,395.06 $1,652,092.56 50,000 $2,056,431.56 $2,082,038.31 Page 2 012 Df?erence Difference $113.15 $104.54 1.1% $139.33 1.2% $174.23 1.3% $232.30 1.4% $174.23 1-1% $209.07 1 2% $232.30 1.2% $377.49 1.4% $290.13 1.0% $343.13 1.1% $336.34 1.1% $323.32 1.2% $1,131.35 1.1% $1,969.75 1.2% $2,530.33 1.2% $2,333.70 1.1% $3,939.50 12% $5,121.35 1.2% $4,727.40 1.1% $7,379.00 1.2% $10,242.70 1.2% $11,313.50 1.1% $19,397.50 1.2% $25,303.75 1.3% Snider, Grace From: Christine Wright Sent: Thursday, May 11, 2017 2:16 PM To: Stepp, Tayior; Snider, Grace Subject: document Attachments: Updated EDU proposal (May 10 OVEC only).pdf Grace and Taylor Attached is draft legislation for Chairman Smith?s review for potential sponsorship. Please let me know if you have any questions or would like additional details. Thank you, Chrisy Con?dential Draft of 10 May 2017 132nd General Assembly Regular Session H.B.IS.B. No. 2017~2018 Representatives A BILL BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: That sections 4928.01, 4928.02, 4928.141, 4928.142, and 4928.143 of the Revised Code be amended to read as follows: Sec. 4928.01 Competitive retaii electric service definitions. (A) As used in this chapter: (1) "Ancillary service" means any function necessary to the provision of electric transmission or distribution service to a retail customer and includes, but is not limited to, scheduling, system control, and dispatch services; reactive supply from generation resources and voltage control service; reactive supply from transmission resources service; reguiation service; frequency response service; energy imbalance service; operating reserve?spinning reserve service; operating reserve-supplemental reserve service; load following; back-up supply service; real?power loss replacement service; dynamic scheduling; system black start capability; and network stability service. (2) "Billing and collection agent" means a fully independent agent, not affiliated with or otherwise controlled by an electric utility, electric services company, electric cooperative, or governmental aggregator subject to certification under section 4928.08 of the Revised Code, to the extent that the agent is under contract with such utility, company, cooperative, or aggregator solely to provide billing and collection for retail electric service on behalf of the utility company, cooperative, or aggregator. (3) "Certified territory" means the certi?ed territory established for an electric supplier under sections 4933.81 to 4933.90 of the Revised Code. (4) "Competitive retail electric service" means a component of retail electric service that is competitive as provided under division (B) of this section. 1 Confidential Draft of 10 May 2017 (5) "Electric cooperative" means a not?for?profit electric light company that both is or has been financed in whole or in part under the ?Rural Electrification Act of 1936,? 49 Stat. 1363, 7 U.S.C. 901, and owns or operates facilities in this state to generate, transmit, or distribute electricity, or a not?for?profit successor of such company. (6) "Electric distribution utility" means an electric utility that supplies at least retail electric distribution service. (7) ?Electric light company" has the same meaning as in section 4905.03 of the Revised Code and includes an electric services company, but excludes any self?generator to the extent that it consumes electricity it so produces, sells that electricity for resale, or obtains electricity from a generating facility it hosts on its premises. (8) "Electric load center" has the same meaning as in section 4933.81 of the Revised Code. (9) "Electric services company? means an electric light company that is engaged on a for?profit or not?for?profit basis in the business of supplying or arranging for the supply of only a competitive retail electric service in this state. "Electric services company? includes a power marketer, power broker, aggregator, or independent power producer but excludes an electric copperative, municipal electric utility, governmental aggregator, or billing and collection agent. (10) ?Electric supplier" has the same meaning as in section 4933.81 of the Revised Code. (11) "Electric utility" means an electric light company that has a certified territory and is engaged on a for?profit basis either in the business of supplying a noncompetitive retail electric service in this state or in the businesses of supplying both a noncompetitive and a competitive retail electric service in this state. "Electric utility" excludes a municipal electric utility or a billing and collection agent. (12) "Firm electric service" means electric service other than nonfirm electric service. (13) "Governmental aggregator? means a legislative authority of a municipal corporation, a board of township trustees, or a board of county commissioners acting as an Con?dential Draft of 10 May 2017 aggregator for the provision of a competitive retail electric service under authority conferred under section 4928.20 of the Revised Code. (14) A person acts "knowingly," regardless of the person's purpose, when the person is aware that the person?s conduct will probably cause a certain result or will probably be of a certain nature. A person has knowledge of circumstances when the person is aware that such circumstances probably exist. (15) "Level of funding for low?income customer energy ef?ciency programs provided through electric utility rates" means the level of funds specifically included in an electric utility?s rates on October 5, 1999, pursuant to an order of the public utilities commission issued under Chapter 4905. or 4909. of the Revised Code and in effect on October 4, 1999, for the purpose of improving the energy ef?ciency of housing for the utility?s low? income customers. The term excludes the level of any such funds committed to a specific nonprofit organization or organizations pursuant to a stipulation or contract. (16) "Low?income customer assistance programs? means the percentage of income payment plan program, the home energy assistance program, the home weatherization assistance program, and the targeted energy efficiency and weatherization program. (17) "Market development period" for an electric utility means the period of time beginning on the starting date of competitive retail electric service and ending on the applicable date for that utility as specified in section 4928.40 of the Revised Code, irrespective of whether the utility applies to receive transition revenues under this chapter. (18) "Market power? means the to impose on customers a sustained price for a product or service above the price that would prevail in a competitive market. (19) "Mercantile customer? means a commercial or industrial customer if the electricity consumed is for nonresidential use and the customer consumes more than seven hundred thousand kilowatt hours per year or is part of a national account involving multiple facilities in one or more states. (20) "Municipal electric utility? means a municipal corporation that owns or operates facilities to generate, transmit, or distribute electricity. 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 Con?dential Draft of 10 May 2017 (21) ?Noncompetitive retail electric service" means a component of retail electric service that is noncompetitive as provided under division (B) of this section. (22) "Nonfirm electric service" means electric service provided pursuant to a schedule filed under section 4905.30 of the Revised Code or pursuant to an arrangement under section 4905.31 ofthe Revised Code, which schedule or arrangement includes conditions that may require the customer to curtail or interrupt electric usage during nonemergency circumstances upon notification by an electric utility. (23) "Percentage of income payment plan arrears" means funds eligible for collection through the percentage of income payment plan rider, but uncollected as of July 1, 2000. (24) "Person" has the same meaning as in section 1.59 ofthe Revised Code. (25) ?Advanced energy project" means any technologies, products, activities, or management practices or strategies that facilitate the generation or use of electricity or energy and that reduce or support the reduction of energy consumption or support the production of clean, renewable energy for industrial, distribution, commercial, institutional, governmental, research, not?for?profit, or residential energy users, including, but not limited to, advanced energy resources and renewable energy resources. "Advanced energy project" also includes any project described in division (A), (B), or (C) of section 4928.621 of the Revised Code. (26) "Regulatory assets" means the unamortized net regulatory assets that are capitalized or deferred on the regulatory books of the electric utility, pursuant to an order or practice of the public utilities commission or pursuant to generally accepted accounting principles as a result of a prior commission rate-making decision, and that would otherwise have been charged to expense as incurred or would not have been capitalized or otherwise deferred for future regulatory consideration absent commission action. "Regulatory assets" includes, but is not limited to, all deferred demand?side management costs; all deferred percentage of income payment plan arrears; post?in? service capitalized charges and assets recognized in connection with statement of financial accounting standards no. 109 (receivables from customers for income taxes); future nuclear decommissioning costs and fuel disposal costs as those costs have been determined by the commission in the electric utility's most recent rate or accounting application proceeding addressing such costs; the undepreciated costs of safety and 4 Con?dential Draft of 10 May 2017 117 radiation control equipment on nuclear generating plants owned or leased by an electric 118 utility; and fuel costs currently deferred pursuant to the terms of one or more settlement 119 agreements approved by the commission. 120 (27) "Retail electric service" means any service involved in supplying or arranging for the 121 supply of electricity to ultimate consumers in this state, from the point of generation to 122 the point of consumption. For the purposes of this chapter, retail electric service includes 123 one or more of the following "service components": generation service, aggregation 124 service, power marketing service, power brokerage service, transmission service, 125 distribution service, ancillary service, metering service, and billing and collection service. 126 (28) ?Starting date of competitive retail electric service" means January 1, 2001. 127 (29) "Customengenerator" means a user of a net metering system. 128 (30) ?Net metering? means measuring the difference in an applicable billing period 129 between the electricity supplied by an electric service provider and the electricity 130 generated by a customer?generator that is fed back to the electric service provider. 131 (31) "Net metering system" means a facility for the production of electrical energy that 132 does all of the following: 133 Uses as its fuel either solar, wind, biomass, landfill gas, or hydropower, or 134 uses a microturbine or a fuel cell; 135 is located on a customer?generator?s premises; 136 Operates in parallel with the electric utility's transmission and distribution 137 facilities; 138 Is intended primarily to offset part or all of the customerugenerator's 139 requirements for electricity. 140 (32) "Self?generator" means an entity in this state that owns or hosts on its premises an 141 electric generation facility that produces electricity primarily for the owner?s consumption 142 and that may provide any such excess electricity to another entity, whether the facility is 143 installed or operated by the owner or by an agent under a contract. 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 Con?dential Draft of 10 May 2017 (33) "Rate plan" means the standard service offer in effect on the effective date of the amendment of this section by 8.8. 221 of the 127th general assembly, July 31, 2008. (34) "Advanced energy resource" means any of the following: Any method or any modification or replacement of any property, process, device, structure, or equipment that increases the generation output of an electric generating facility to the extent such efficiency is achieved without additional carbon dioxide emissions by that facility; Any distributed generation system consisting of customer cogeneration technology; (0) Clean coal technology that includes a carbon-based product that is chemically altered before combustion to demonstrate a reduction, as expressed as ash, in emissions of nitrous oxide, mercury, arsenic, chlorine, sulfur dioxide, or sulfur trioxide in accordance with the American society of testing and materials standard D1757A or areduction of metal oxide emissions in accordance with standard D5142 of that society, or clean coal technology that includes the design capability to control or prevent the emission of carbon dioxide, which design capability the commission shali adopt by rule and shall be based on economically feasible best available technology or, in the absence of a determined best available technology, shall be of the highest level of economically feasible design capability for which there exists generally accepted scientific opinion; Advanced nuclear energy technology consisting of generation ill technology as defined by the nuclear regulatory commission; other, later technology; or . significant improvements to existing facilities; Any fuel ceil used in the generation of electricity, including, but not limited to, a proton exchange membrane fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, or solid oxide fuel cell; Advanced solid waste or construction and demolition debris conversion technology, including, but not limited to, advanced stoker technology, and advanced fluidized bed gasification technology, that results in measurable 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 Con?dential Draft of 10 May 2017 greenhouse gas emissions reductions as calculated pursuant to the United States environmental protection agency?s waste reduction model Demand-side management and any energy ef?ciency improvement; Any new, retrofitted, refueled, or repowered generating facility located in Ohio, including a simple or combined~cycle natural gas generating facility or a generating facility that uses biomass, coal, modular nuclear, or any other fuel as its input; Any uprated capacity of an existing electric generating facility if the uprated capacity results from the deployment of advanced technology. "Advanced energy resource" does not include a waste energy recovery system that is, or has been, included in an energy efficiency program of an electric distribution utility pursuant to requirements under section 4928.66 of the Revised Code. (35) ?Air contaminant source" has the same meaning as in section 3704.01 ofthe Revised Code. (36) "Cogeneration technology" means technology that produces electricity and useful thermal output simultaneously. (37) "Renewable energy resource" means any of the following: Solar photovoltaic or solar thermal energy; (ii) Wind energy; Power produced by a hydroelectric facility; (iv) Power produced by a run?of?the?river hydroelectric facility placed in service on or after January 1, 1980, that is located within this state, relies upon the Ohio river, and operates, or is rated to operate, at an aggregate capacity of forty or more megawatts; 199 200 201 202 203 204 205 206 207 208 209 210 21 1 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 Con?dential Draft of 10 May 2017 Geothermal energy; (vi) Fuel derived from solid wastes, as defined in section 3734.01 of the Revised Code, through fractionation, biological decomposition, or other process that does not principally involve combustion; (vii) Biomass energy; Energy produced by cogeneration technology that is placed into service on or before December 31, 2015, and for which more than ninety per cent of the total annual energy input is from combustion of a waste or byproduct gas from an air contaminant source in this state, which source has been in operation since on or before January 1, 1985, provided that the cogeneration technology is a part of a facility located in a county having a population of more than three hundred sixty-five thousand but less than three hundred seventy thousand according to the most recent federal decennial census; (ix) Biologically derived methane gas; Heat captured from a generator of electricity, boiler, or heat exchanger fueled by biologically derived methane gas; (xi) Energy derived from nontreated by?products of the pulping process or wood manufacturing process, including bark, wood chips, sawdust, and lignin in spent pulping liquors. "Renewable energy resource? includes, but is not limited to, any fuel cell used in the generation of electricity, including, but not limited to, a proton exchange membrane fuel cell, phosphoric acid fuel cell, molten carbonate fuel cell, or solid oxide fuel cell; wind turbine located in the state's territorial waters of Lake Erie; methane gas emitted from an abandoned coal mine; waste energy recovery system placed into service or retrofitted on or after the effective date of the amendment of this section by 8.8. 315 of the 129th general assembly, September 10, 2012, except that a waste energy recovery system described in division of this section may be included only if it was placed into service between January 1, 2002, and December 31, 2004; storage facility that 8 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 Con?dential Draft of 10 May 2017 will promote the better utilization of a renewable energy resource; or distributed generation system used by a customer to generate electricity from any such energy. ?Renewable energy resource" does not include a waste energy recovery system that is, or was, on or after January 1, 2012, included in an energy efficiency program of an electric distribution utility pursuant to requirements under section 4928.66 of the Revised Code. As used in division of this section, "hydroelectric facility" means a hydroelectric generating facility that is located at a dam on a river, or on any water discharged to a river, that is within or bordering this state or within or bordering an adjoining state and meets all of the following standards: The facility provides for river flows that are not detrimental for fish, wildlife, and water quality, including seasonal flow fluctuations as defined by the applicable licensing agency for the facility. (ii) The facility demonstrates that it complies with the water quality standards of this state, which compliance may consist of certification under Section 401 ofthe "Clean Water Act of 1977," 91 Stat. 1598, 1599, 33 U.S.C. 1341, and demonstrates that it has not contributed to a finding by this state that the river has impaired water quality under Section 303(d) of the "Clean Water Act of 1977," 114 Stat. 870, 33 U.S.C. 1313. The facility complies with mandatory prescriptions regarding fish passage as required by the federal energy regulatory commission license issued forthe project, regarding fish protection for riverine, anadromous, and catadromous fish. (iv) The facility complies with the recommendations of the Ohio environmental protection agency and with the terms of its federal energy regulatory commission license regarding watershed protection, mitigation, or enhancement, to the extent of each agency's respective jurisdiction over the facility. 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 Con?dential Draft of 10 May 2017 The facility complies with provisions of the "Endangered Species Act of 1973," 87 Stat. 884, 16 U.S.C. 1531 to 1544, as amended. (vi) The facility does not harm cultural resources of the area. This can be shown through compliance with the terms of its federal energy regulatory commission license or, if the facility is not regulated by that commission, through development of a plan approved by the Ohio historic preservation office, to the extent it has jurisdiction over the facility. (vii) The facility complies with the terms of its federal energy regulatory commission license or exemption that are related to recreational access, accommodation, and facilities or, if the facility is not regulated by that commission, the facility complies with similar requirements as are recommended by resource agencies, to the extent they have jurisdiction over the facility; and the facility provides access to water to the public without fee or charge. The facility is not recommended for removal by any federal agency or agency of any state, to the extent the particular agency has jurisdiction over the facility. (38) "Waste energy recovery system" means either of the following: A facility that generates electricity through the conversion of energy from either of the following: Exhaust heat from engines or manufacturing, industrial, commercial, or institutional sites, except for exhaust heat from a facility whose primary purpose is the generation of electricity; (ii) Reduction of pressure in gas pipelines before gas is distributed through the pipeline, provided that the conversion of energy to electricity is achieved without using additional fossil fuels. A facility at a state institution of higher education as defined in section 3345.011 of the Revised Code that recovers waste heat from electricity- producing engines or combustion turbines and that simultaneously uses the 10 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 Con?dential Draft of 10 May 2017 recovered heat to produce steam, provided that the facility was placed into service between January 1, 2002, and December 31, 2004. (39) ?Smart grid? means capital improvements to an electric distribution utility's distribution infrastructure that improve reliability, ef?ciency, resiliency, or reduce energy demand or use, including, but not limited to, advanced metering, and automation of system functions. (40) "Combined heat and power system? means the coproduction of electricity and useful thermal energy from the same fuel source designed to achieve thermal?efficiency levels of at least sixty per cent, with at least twenty per cent of the system?s total useful energy in the form of thermal energy. (41) "National security generation resource? means all generating facilities owned directly or indirectly by a corporation that was formed prior to 1960 by investor-owned utilities for the originaipurpose of providing power to the federal government for use in the nation?s defense or in furtherance of national interests including the Ohio Valley Electric Corporation. (B) For the purposes of this chapter, a retail electric service component shall be deemed a competitive retail electric service if the service component is competitive pursuant to a declaration by a provision of the Revised Code or pursuant to an order of the public utilities commission authorized under division (A) of section 4928.04 of the Revised Code. Otherwise, the service component shall be deemed a noncompetitive retail electric service. Sec. 4928.02 State policy. it is the policy of this state to do the following throughout this state: (A) Ensure the availability to consumers of adequate, reliabie, safe, efficient, nondiscriminatory, and reasonably priced retail electric service; (B) Ensure the availability of unbundled and comparabie retail electric service that provides consumers with the supplier, price, terms, conditions, and quality options they elect to meet their respective needs; 11 314 315 316 317 318 319 320 321 322 323 324 325 328 327 328 329 330 331 332 333 334 335 336 337 338 339 340 341 342 Con?dential Draft of 10 May 2017 (C) Ensure diversity of electricity supplies and suppliers, by giving consumers effective choices over the selection of those supplies and suppliers and by encouraging the development of distributed and small generation facilities; (D) Encourage innovation and market access for cost?effective supply? and demand?side retail electric service including, but not limited to, demand?side management, time?differentiated pricing, waste energy recovery systems, smart grid programs, and implementation of advanced metering infrastructure; (E) Encourage cost?effective and efficient access to information regarding the operation of the transmission and distribution systems of electric utilities in order to promote both effective customer choice of retail electric service and the development of performance standards and targets for service quality for all consumers, including annual achievement reports written in plain language; (F) Ensure that an electric utility's transmission and distribution systems are available to a customer~generator or owner of distributed generation, so that the customer?generator or owner can market and deliver the electricity it produces; (G) Recognize the continuing emergence of competitive electricity markets through the development and implementation of flexible regulatory treatment; (H) Ensure effective competition in the provision of retail electric service by avoiding anticompetitive subsidies flowing from a noncompetitive retail electric service to a competitive retail electric service or to a product or service other than retail electric service, and vice versa, including by prohibiting the recovery of any generation?related costs through distribution or transmission rates; Ensure retail electric service consumers protection against unreasonable sales practices, market deficiencies, and market power; (J) Provide coherent, transparent means of giving appropriate incentives to technologies that can adapt successfully to potential environmental mandates; (K) Encourage implementation of distributed generation across customer classes through regular review and updating of administrative rules governing critical issues such as, but not limited to, interconnection standards, standby charges, and net metering; 12 343 344 345 346 347 348 349 350 351 352 353 354 355 356 357 358 359 360 361 362 363 364 365 366 367 368 369 370 371 372 Con?dential Draft of 10 May 2017 (L) Protect at?risk populations, including, but not limited to, when considering the implementation of any new advanced energy or renewable energy resource; (M) Encourage the education of small business owners in this state regarding the use of, and encourage the use of, energy efficiency programs and alternative energy resources in their businesses; (N) Facilitate the state's effectiveness in the global economy; (0) Ensure the continuinq economic viability of historical investments made by electric distribution utilities in national security generating resources and support continued investment to preserve the onqoinq benefits associated with such resources. in carrying out this policy, the commission shall consider rules as they apply to the costs of electric distribution infrastructure, including, but not limited to, line extensions, for the purpose of deveiopment in this state. Sec. 4928.141 Distribution utility to provide standard service offer. (A) Beginning January 1, 2009, an electric distribution utility shall provide consumers, on a comparable and nondiscriminatory basis within its certified territory, a standard service offer of all competitive retail electric services necessary to maintain essential electric service to consumers, including a firm supply of electric generation service. To that end, the electric distribution utility shall apply to the public utilities commission to establish the standard service offer in accordance with section 4928.142 or 4928.143 ofthe Revised Code and, at its discretion, may apply simultaneously under both anGees. Only a standard service offer authorized in accordance with section 4928.142 or 4928.143 of the Revised Code, shall serve as the utility?s standard service offer for the purpose of compliance with this section; and that standard service offer shall serve as the utility?s default standard service offer for the purpose of section 4928.14 of the Revised Code. Notwithstanding 373 374 375 376 377 378 379 380 381 382 383 384 385 386 387 388 389 390 391 392 393 394 395 396 397 398 399 400 401 402 403 Con?dential Draft of 10 May 2017 A standard service offer under section 4928.142 or 4928.143 of the Revised Code shall include automatic recovery, subiect to audit and reconciliation, of all costs, including any deferred costs, associated with an electric distribution utility?s contractual commitments related to a national security generation resource but shall exclude any previously authorized allowances for transition costs, with such exclusion being effective on and after the date that the allowance is scheduled to and under the utility's rate plan. (B) An electric distribution utility with an affiliate that has a contractual commitment related to a national security generation resource may use the output from the affiliates contractual commitment in its standard service offer provided under sections 4928.142 or 4928.143 of the Revised Code, provided that the affiliates contractual commitment was previously the contractual commitment of the electric distribution utility. The utility shall recover any and all costs including any deferred costs; of the affiliates share of the resource. All electric distribution utilities in the same holding company system may iointly use the output of the affiliate?s contractual commitment in their standard service offer. (9Q) The commission shall set the time for hearing of a filing under section 4928.142 or 4928.143 of the Revised Code, send written notice of the hearing to the electric distribution utility, and publish notice in a newspaper of general circulation in each county in the utility?s certified territory. The commission shall adopt rules regarding filings under those sections. Sec. 4928.142 Standard generation service offer price competitive bidding. (A) For the purpose of complying with section 4928.141 of the Revised Code and subject to division (D) otthis section . --: -, -- .- - .- an electric distribution utility may establish a standard service offer price for retail electric generation service that is delivered to the utility under a market~rate offer. An electric distribution utility shall have the right within one hundred twenty days of the effective date of ofthe 132nd general assembly to file an application to reopen. update, or amend its then?current market?rate offer in order to implement the amended version of this section which proceeding shall not othenivise reopen matters previously decided. (1) Themarketrateeffer supply and pricing of electric generation service under a market?rate offer shall be determined through a competitive bidding process that provides for all of the following: 14 404 405 406 407 408 409 410 411 412 413 414 415 416 417 418 419 420 421 422 423 424 425 425 427 428 429 430 431 432 Con?dential Draft of 10 May 2017 Open, fair, and transparent competitive solicitation; Clear product definition; Standardized bid evaluation criteria; Oversight by an independent third party that shall design the solicitation, administer the bidding, and ensure that the criteria specified in division to of this section are met; Evaluation of the submitted bids prior to the selection of the least?cost bid winner or winners. No generation supplier shall be prohibited from participating in the bidding process. (2) The market?rate otter shall include provisions for recovery of all costs, including any deferred costs, associated with an electric distribution utility?s contractual commitments related to a national security generation resource. If the electric distribution utility agrees to offer the contractual commitment related to the national security generation resource into wholesale markets with any resulting revenues beinq credited to the benefit of retail customers, such recovery shall be granted by the commission on a nonbvpassable basis. The public utilities commission shall modify rules, or adopt new rules as necessary, concerning the conduct of the competitive bidding process and the qualifications of bidders, which rules shall foster supplier participation in the bidding process and shall be consistent with the requirements of division of this section. (B) Prior to initiating a competitive bidding process for a marketqate offer under division (A) of this section, the electric distribution utility shall file an application with the commission. An electric distribution utility may file its application with the commission prior to the effective date of the commission rules required under division of this section, and, as the commission determines necessary, the utility shall immediately conform its tiling to the rules upon their taking effect. An application under this division shall detail the electric distribution utility?s proposed compliance with the requirements of division ofthis section and with commission rules under division of this section and demonstrate that all of the following requirements are met: 15 433 434 435 436 437 438 439 440 441 442 443 444 445 448 447 448 449 450 451 452 453 454 455 458 457 458 459 460 461 462 463 464 Con?dential Draft of 10 May 2017 (1) The electric distribution utility or its transmission service affiliate belongs to at least one regional transmission organization that has been approved by the federai energy regulatory commission; or there otherwise is comparable and nondiscriminatory access to the electric transmission grid. (2) Any such regional transmission organization has a market~monitor function and the ability to take actions to identify and mitigate market power or the eiectric distribution utility's market conduct; or a similar market monitoring function exists with commensurate ability to identify and monitor market conditions and mitigate conduct associated with the exercise of market power. (3) A published source of information is availabie publicly or through subscription that identi?es pricing information for traded electricity on- and off?peak energy products that are contracts for delivery beginning at least two years from the date of the pubiication and is updated on a regular basis. The commission shall initiate a proceeding and, within ninety days after the application?s filing date, shall determine by order whether the electric distribution utility and its market?rate offer meet all of the foregoing requirements. If the finding is positive, the electric distribution utility may initiate its competitive bidding process. if the finding is negative as to one or more requirements in divisions or or this section, the commission in the order shall direct the electric distribution . utility regarding how any deficiency may be remedied in a timely manner to the commission's satisfaction; otherwise, the eiectric distribution utility shall withdraw the application. However, if such remedy is made and the subsequent ?nding is positive and also if the electric distribution utility made a simultaneous filing under this section and section 4928.143 of the Revised Code, the utility shall not initiate its competitive bid until at least one hundred fifty days after the date of those applications. If the electric distribution utility withdraws the application, the commission shail issue an order as is necessary to ensure automatic recovery of all costs, including any deferred costs, associated with a national security generation resource. (C) Upon the completion ofthe competitive bidding process authorized by divisions (A) and (B) of this section, including for the purpose of division (D) ofthis section, the commission shall select the least?cost bid winner or winners of that process, and such selected bid or bids, as prescribed as retail rates by the commission, shall be the electric distribution utility?s standard service offer unless the commission, by order issued before the third caiendar day following the 16 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 493 494 Con?dential Draft of 10 May 2017 conclusion of the competitive bidding process for the market rate offer, determines that one or more of the following criteria were not met: (1) Each portion of the bidding process was oversubscribed, such that the amount of supply bid upon was greater than the amount of the load bid out. (2) There were four or more bidders. (3) At least twenty?five per cent of the load is bid upon by one or more persons other than the electric distribution utility. All costs incurred by the electric distribution utility as a result of or related to the competitive bidding process or to procuring generation service to provide the standard service offer, including the costs of energy and capacity and the costs of all other products and services procured as a result of the competitive bidding process, shall be timely recovered through the standard service offer price, and, forthat purpose, the commission shall approve a reconciliation mechanism, other recovery mechanism, or a combination of such mechanisms for the utility. (D) The first application filed under this section by an electric distribution utility that, as of July 31, 2008, directly owns, in whole or in part, operating electric generating facilities that had been used and useful in this state shall require that a portion ofthat utility's standard service offer load for the first five years of the market rate offer be competitively bid under division (A) ofthis section as follows: ten per cent ofthe load in year one, not more than twenty per cent in year two, thirty per cent in year three, forty per cent in year four, and ?fty per cent in year ?ve. Consistent with those percentages, the commission shall determine the actual percentages for each year of years one through five. The standard service offer price for retail electric generation service under this first application shall be a proportionate blend of the bid price and the generation service price for the remaining standard service offer load, which latter price shall be equal to the electric distribution utility?s most recent standard service offer price, adjusted upward or downward as the commission determines reasonable, relative to thejurisdictional portion of any known and measurable changes from the level of any one or more of the following costs as reflected in that most recent standard service offer price: (1) The electric distribution utility?s prudently incurred cost of fuel used to produce electricity; (2) Its prudently incurred purchased power costs; 17 495 496 497 498 499 500 501 502 503 504 505 506 507 508 509 510 511 512 513 514 515 516 517 518 519 520 521 522 523 524 525 526 527 Confidential Draft of 10 May 2017 (3) Its prudently incurred costs of satisfying the supply and demand portfolio requirements of this state, including, but not limited to, renewableenergy resource and energy efficiency requirements; (4) its costs prudently incurred to comply with environmental laws and regulations, with consideration of the derating of any facility associated with those costs. In making any adjustment to the most recent standard service offer price on the basis of costs described in division (D) ofthis section, the commission shall include the benefits that may become available to the electric distribution utility as a result of or in connection with the costs included in the adjustment, including, but not limited to, the utility's receipt of emissions credits or its receipt of tax benefits or of other benefits, and, accordingly, the commission may impose such conditions on the adjustment to ensure that any such benefits are properly aligned with the associated cost responsibility. The commission shall also determine how such adjustments will affect the electric distribution utility's return on common equity that may be achieved by those adjustments. The commission shall not apply its consideration of the return on common equity to reduce any adjustments authorized under this division unless the adjustments will cause the electric distribution utility to earn a return on common equity that is significantly in excess of the return on common equity that is earned by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. The burden of proof for demonstrating that significantly excessive earnings will not occur shall be on the electric distribution utility. Additionally, the commission may adjust the electric distribution utility?s most recent standard service offer price by such just and reasonable amount that the commission determines necessary to address any emergency that threatens the utility's financial integrity or to ensure that the resulting revenue available to the utility for providing the standard service offer is not so inadequate as to result, directly or indirectly, in a taking of property without compensation pursuant to Section 19 of Article I, Ohio Constitution. The electric distribution utility has the burden of demonstrating that any adjustment to its most recent standard service offer price is proper in accordance with this division. (E) Beginning in the second year of a blended price under division (D) of this section and notwithstanding any other requirement of this section, the commission may alter prospectively the proportions specified in that division to mitigate any effect of an abrupt or significant change in the electric distribution utility's standard service offer price that would otherwise result in 18 528 529 530 531 532 533 534 535 536 537 538 539 540 541 542 543 544 545 545 547 548 549 550 551 552 553 554 555 556 557 558 Con?dential Draft of 10 May 2017 general or with respect to any rate group or rate schedule but for such alteration. Any such alteration shall be made not more often than annually, and the commission shall not, by altering those proportions and in any event, including because of the length of time, as authorized under division (C) of this section, taken to approve the market rate offer. cause the duration of the blending period to exceed ten years as counted from the effective date of the approved market rate offer. Additionally, any such alteration shall be limited to an alteration affecting the prospective proportions used during the blending period and shall not affect any blending proportion previously approved and applied by the commission under this division. (F) An electric distribution utility that has received commission approval of its first application under division (C) of this section shall not, nor ever shall be authorized or required by the commission to, file an application under section 4928.143 of the Revised Code. Sec. 4928.143 Application for approval of electric security plan testing. (A) For the purpose of complying with section 4928.141 of the Revised Code, an electric distribution utility may file an application for public utilities commission approval of an electric security plan as prescribed under division (B) of this section. The utility may file that application prior to the effective date of any rules the commission may adopt for the purpose of this section, and, as the commission determines necessary, the utility immediately shall conform its ?ling to those rules upon their taking effect. An electric distribution utility shall have the right within one hundred twenty days of the effective date of of the 132nd general assembly to file an application to reopen, update, or amend its then?current standard service offer in order to implement the amended version of this section which proceeding shall not otherwise reopen matters previously decided. Upon approval of an update or amendment to implement the change in law, any terms and conditions of the prior electric security plan relating to a national security generation resource shall no longer be in effect. (B) Notwithstanding any other provision of Title XLIX of the Revised Code to the contrary except division (D) of this section, divisions (J), and (K) of section 4928.20, division (E) of section 4928.64, and section 4928.69 of the Revised Code: . (1) An electric security plan shall include provisions relating to the supply and pricing of electric generation service and relating to recovery of all costs, including any deferred costs, associated with an electric distribution utility?s contractual commitments related to a national security generation resource. If the electric distribution utility agrees to offer 19 559 560 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 578 579 580 581 582 583 584 585 586 587 588 589 Con?dential Draft of 10 May 2017 the contractual commitment related to the national security generation resource into wholesale markets with any resulting revenues being credited to the benefit of retail customers, such recbvery shall be granted by the commission on a nonbypassable basis, In addition, if the proposed electric security plan has a term longer than three years, it may include provisions in the plan to permit the commission to test the plan pursuant to division (E) of this section and any transitional conditions that should be adopted by the commission if the commission terminates the plan as authorized under that division. (2) The plan may provide for or include, without limitation, any of the following: Automatic recovery of any of the following costs of the electric distribution utility, provided the cost is prudently incurred: the cost of fuel used to generate the electricity supplied under the offer; the cost of purchased power supplied under the offer, including the cost of energy and capacity, and including purchased power acquired from an affiliate; the cost of emission allowances; and the cost of federally mandated carbon or energy taxes; A reasonable allowance for construction work in progress for any of the electric distribution utility's cost of constructing an electric generating facility or for an environmental expenditure for any electric generating facility of the electric distribution utility, provided the cost is incurred or the expenditure occurs on or after January 1, 2009. Any such allowance shall be subject to the construction work in progress allowance limitations of division (A) of section 4909.15 of the Revised Code, except that the commission may authorize such an allowance upon the incurrence of the cost or occurrence of the expenditure. No such allowance for generating facility construction shall be authorized, however, unless the commission first determines in the proceeding that there is need for the facility based on resource planning projections submitted by the electric distribution utility. Further, no such allowance shall be authorized unless the facility?s construction was sourced through a competitive bid process, regarding which process the commission may adopt rules. An allowance approved under division of this section shall be established as a nonbypassable surcharge for the life of the facility. 20 590 591 592 593 594 595 596 597 598 599 800 801 502 803 604 805 606 607 608 609 610 611 612 613 614 615 616 617 618 619 820 Con?dential Draft of 10 May 2017 The establishment of a nonbypassable surcharge for the life of an electric generating facility that is owned or operated by the electric distribution utility, was sourced through a competitive bid process subject to any such rules as the commission adopts under division of this section, and is newly used and useful on or after January 1, 2009, which surcharge shall cover all costs of the utility specified in the application, excluding costs recovered through a surcharge under division of this section. However, no surcharge shall be authorized unless. the commission first determines in the proceeding that there is need for the facility based on resource planning projections submitted by the electric distribution utility. Additionally, if a surcharge is authorized for a facility purSuant to plan approval under division (C) ofthis section and as a condition of the continuation of the surcharge, the electric distribution utility shall dedicate to Ohio consumers the capacity and energy and the rate associated with the cost of that facility. Before the commission authorizes any surcharge pursuant to this division, it may consider, as applicable, the effects of any decommissioning, deratings, and retirements. Terms, conditions, or charges relating to limitations on customer shopping for retail electric generation service, bypassability, standby, backup, or supplemental power service, default service, carrying costs, amortization periods, and accounting or deferrals, including future recovery of such deferrals, as would have the effect of stabilizing or providing certainty regarding retail electric service; Automatic increases or decreases in any component of the standard service offer price; Consistent with sections 4928.23 to 49282318 of the Revised Code, both of the following: Provisions for the electric distribution utility to securitize any phase?in, inclusive of carrying charges, ofthe utility?s standard service offer price, which phase?in is authorized in accordance with section 4928.144 of the Revised Code; (ii) Provisions for the recovery of the utility's cost of securitization. 21 621 622 623 624 625 626 627 628 629 630 631 632 633 634 635 636 637 638 639 640 641 642 643 644 645 646 647' 648 649 650 651 (C) Con?dential Draft of 10 May 2017 Provisions relating to transmission, ancillary, congestion, or any related service required for the standard service offer, including provisions for the recovery of any cost of such service that the electric distribution utility incurs on or after that date pursuant to the standard service offer; Provisions regarding the utility's distribution service, including, without limitation and notwithstanding any provision of Title of the Revised Code to the contrary, provisions regarding single issue ratemaking, a revenue decoupling mechanism or any other incentive ratemaking, and provisions regarding distribution infrastructure and modernization incentives for the electric distribution utility. The latter may include a long?term energy delivery infrastructure modernization pian for that utility or any plan providing for the utility's recovery of costs, including lost revenue, shared savings, and avoided costs, and a just and reasonable rate of return on such infrastructure modernization. As part of its determination as to whetherto allow in an electric distribution utility's electric security plan inclusion of any provision described in division of this section, the'commission shall examine the reliability of the electric distribution utility?s distribution system and ensure that customers? and the electric distribution utility?s expectations are aligned and that the electric distribution utility is placing sufficient emphasis on and dedicating sufficient resources to the reliability of its distribution system. Provisions under which the electric distribution utility may implement economic development, job retention, and energy efficiency programs, which provisions may allocate program costs across all classes of customers of the utility and those of electric distribution utilities in the same holding company system. (1) The burden of proof in the proceeding shall be on the electric distribution utility,L except that the pubiic utilities commission must approve automatic cost recovery of all costs, including any deterred costs, associated with a national security generation resource. The commission shall issue an order under this division for an initial application under this section not later than one hundred fifty days after the application's filing date and, for any subsequent application by the under this section, not later 22 652 653 654 655 656 657 658 659 660 661 662 663 664 665 666 667 668 669 670 671 672 673 674 675 676 677 678 679 680 681 682 Confidential Draft of 10 May 2017 than two hundred seventy?five days after the application's filing date. Subject to division (D) of this section, the commission by order shall approve or modify and approve an application filed under division (A) of this section if it finds that the electric security plan so approved, including its pricing and all other terms and conditions, including any deferrals and any future recovery of deferrals, is more favorable in the aggregate as compared to the expected results that would otherwise apply under section 4928.142 of the Revised Code. Additionally, ifthe commission so approves an application that contains a surcharge under division or of this section, the commission shall ensure that the benefits derived for any purpose for which the surcharge is established are reserved and made available to those that bear the surcharge. Otherwise, the commission by order shall disapprove the application. (2) if the commission modifies and approves an application under division of this section, the electric distribution utility may withdraw the application, thereby terminating it, and may file a new standard service offer under this section or a standard service offer under section 4928.142 of the Revised Code. Ifthe utility terminates an application pursuant to division of this section or if the commission disapproves an application under division of this section, the commission shall issue such order as is necessary to ensure automatic cost recovery of all costs, including any deferred costs, associated with a national security generation resource and to continue the provisions, terms, and conditions of the utility's most recent standard service offer, along with any expected increases or decreases in fuel costs from those contained in that offer, until a subsequent offer is authorized pursuant to this section or section 4928.142 of the Revised Code, respectively. (D) Regarding the rate plan requirement of division (A) of section 4928.141 of the Revised Code, if an electric distribution utility that has a rate plan that extends beyond December 31, 2008, files an application under this section for the purpose of its compliance with division (A) of section 4928.141 of the Revised Code, that rate plan and its terms and conditions are hereby incorporated into its proposed electric security plan and shall continue in effect until the date scheduled under the rate plan for its expiration, and that portion of the electric security plan shall 23 683 684 685 686 687 688 689 690 691 692 693 694 695 696 697 698 699 700 701 702 703 704 705 706 707 708 709 710 71 1 712 713 714 Con?dential Draft of 10 May 2017 not be subject to commission approval or disapproval under division (C) of this section, and the earnings test provided for in division (F) of this section shall not apply until after the expiration of the rate plan. However, that utility may include in its electric security plan under this section, and the commission may approve, modify and approve, or disapprove subject to division (C) of this section, provisions for the incremental recovery or the deferral of any costs that are not being recovered under the rate plan and that the utility incurs during that continuation period to comply with section 4928.141, division (B) of section 4928.64, or division (A) of section 4928.66 of the Revised Code. (E) If an electric security plan approved under division (C) of this section, except one withdrawn by the utility as authorized under that division, has a term, exclusive of phase?ins or deferrals, that exceeds three years from the effective date of the plan, the commission shall test the plan in the fourth year, and if applicable, every fourth year thereafter, to determine whether the plan, including its then~existing pricing and all other terms and conditions, including any deferrals and any future recovery of deferrals, continues to be more favorable in the aggregate and during the remaining term of the plan as compared to the expected results that would otherwise apply under section 4928.142 of the Revised Code. The commission shall also determine the prospective effect of the electric security plan to determine if that effect is substantially likely to provide the electric distribution utility with a return on common equity that is significantly in excess of the return on common equity that is likely to be earned by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. The burden of proof for demonstrating that significantly excessive earnings will not occur shall be on the electric distribution utility. lfthe test results are in the negative or the commission finds that continuation of the electric security plan will result in a return on equity that is significantly in excess of the return on common equity that is likely to be earned by publicly traded companies, including utilities, that will face comparable business and financial risk, with such adjustments for capital structure as may be appropriate, during the balance of the plan, the commission may terminate the electric security plan, but not until it shall have provided interested parties with notice and an opportunity to be heard. The commission may impose such conditions on the plan's termination as it considers reasonable and necessary to accommodate the transition from an approved plan to the more advantageous alternative. In the event of an electric security plan's termination pursuant to this division, the commission shall permit the continued deferral and phase?in of any amounts that occurred prior to that 24 715 716 717 718 719 720 721 722 723 724 725 726 727 723 729 730 731 732 733 734 735 736 Con?dential Draft of 10 May 2017 termination and the recovery of those amounts as contemplated under that electric security plan. (F) With regard to the provisions that are included in an electric security plan under this section, the commission shall consider, following the end of each annual period of the plan, if any such adjustments resulted in excessive earnings as measured by whether the earned return on common equity of the electric distribution utility is significantly in excess of the return on common equity that was earned during the same period by publicly traded companies, including utilities, that face comparable business and financial risk, with such adjustments for capital structure as may be appropriate. Consideration also shall be given to the capital requirements of future committed investments in this state. The burden of prooic for demonstrating that significantly excessive earnings did not occur shall be on the electric distribution utility. lf the commission finds that such adjustments, in the aggregate, did result in significantly excessive earnings, it shall require the electric distribution utility to return to consumers the amount of the excess by prospective adjustments; provided that, upon making such prospective adjustments, the electric distribution utility shall have the right to terminate the plan and immediately file an application pursuant to section 4928.142 of the Revised Code. Upon termination of a plan under this division, rates shall be set on the same basis as specified in division of this section, and the commission shall permit the continued deferral and phase?in of any amounts that occurred prior to that termination and the recovery of those amounts as contemplated under that electric security plan. In making its determination of significantly excessive earnings under this division, the commission shall not consider, directly or indirectly, the revenue, expenses, or earnings of any af?liate or parent company. 25 Snider, Grace From: Wolf, Jimmy Sent: Tuesday, June 20, 2017 8:42 AM To: Schwartz, Patrick Subject: RE: HB 239 lP Meeting Yes that is correct. lwiil keep you up to date if Rep. Seitz is running behind because of committee. From: Schwartz, Patrick Sent: Tuesday, June 20, 2017 8:40 AM To: Wolf, Jimmy Subject: RE: HB 239 lP Meeting Just confirming this is still the time and location From: Wolf, Jimmy Sent: Monday, June 19, 2017 11:29 AM To: ?Ferruso, Chris' 'raugsburger@0hiomfg.com' Chrisy Bowen Wright (cdwright@aep.com) 'tlfroehle@aep.com' ; energy.com>; Steve Lake - Dayton Power and Light (steve.lake@aes.coml Ty Pine 'dlarr@iarrpc.com' Lehman, Ryan Smith, Ryan Cc: Schwartz, Patrick Snider, Grace Stepp, Taylor Subject: HB 239 IP Meeting Good Morning, Chairman Seitz asked me to reach out to invite you all to an interested party meeting regarding HB 239 (OVEC) tomorrow, June 20th at 10:15 AM. The meeting will be taking place in room 216 of the Statehouse. wiil be able to begin directing people to the conference room from the State Street entrance of the Statehouse at 10 AM. if you could please let me know your availability for this meeting by the close of business today, that would be greatly appreciated. Sincerely, Jimmy Wolf Legislative Aide to Representative Bill Seitz 30th House District 614.466.8258 Jimmv.woif@ohiohouse.gov