EPSA and P3 speak out about PUCO PPA approval

Several industry representatives critiqued the Public Utilities Commission of Ohio’s (PUCO) decision to approve Purchase Power Agreements (PPAs) for FirstEnergy and AEP on Thursday, warning that the PPAs were deeply flawed and will hurt consumers.

Representatives from the PJM Power Providers Group (P3), Electric Power Supply Association (EPSA) and Harvard University said that the agreements are irresponsible, saying that they amounted to a bailout. Protecting FirstEnergy and AEP from risk of loss, they warned, will result in consumer price increases to cover associated costs.

“Today’s decision by the PUC of Ohio impermissibly attempts to regulate wholesale power markets and contracts between affiliates that are within the jurisdiction of the Federal Energy Regulatory Commission (FERC),” EPSA CEO and President John E. Shelk said. “There is no disputing the overwhelming evidence in the PUCO dockets that the abusive contracts approved today will unnecessarily raise rates for consumers, shift risks from utility shareholders to consumers, and distort the multi-state wholesale market on which tens of millions of customers depend for their electricity.”

Shelk and P3 President Glen Thomas urged FERC, the General Assembly and Ohio Governor John Kasich to confront PUCO on its decision in the best interest of consumers and fair politics.

Dr. Joseph P. Kalt, emeritus professor of international political economy at Harvard University, said that, historically, such dealings keep inefficient, high-cost energy facilities operational, forcing ratepayers to bear the burden.