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Ohio Supreme Court Reverses DP&L Coal Plant ‘Security Plan,’ Saving Ratepayers $80M This Year

June 22, 2016 By Cheryl Kaften

The Ohio Supreme Court on June 20 reversed a Public Utilities Commission of Ohio (PUCO) decision (Docket No. 16-0395-EL-SSO) that allowed local utility Dayton Power & Light (DP&L) to charge its 515,000 customers extra in an “electric security plan.”

DP&L filed its electric security plan for the years, 2017 to 2026, on February 22. Like American Electric Power (AEP) and First Energy, the utility was looking to protect its fossil fuel operations – specifically, what it described as 2, 281 megawatts (MW) of “environmentally compliant” coal generation. DP&L argued that a 10 year power purchase agreement (PPA) was needed to keep the coal plants open in the short-term because of low natural gas prices.

As the utility explained it, “The proposed plan includes a new charge that will appear on all customer bills, the purpose of which is to ensure the reliability of electric supply in Ohio. Each year, that charge will reset based on actual market conditions and will be reviewed by the PUCO. Over the life of the plan, the charge is projected by an independent third party to decrease and become a credit to all customer bills, moderating prices. If approved as proposed, starting in the first year (2017) the charge for DP&L’s average residential customer’s total bill, using 1,000 kilowatt hours (kWh) per month is $1.21 or approximately a 1% increase.”

However, the court did not see it that way (Case No. 2014-1505). Indeed, the reversal is anticipated to save saves local ratepayers $80 million they would have paid the utility this year, according to the Ohio Consumers’ Counsel, which appealed the PUCO decision along with the Industrial Energy Consumers of Ohio.

“Today’s decision by the Ohio Supreme Court — that DP&L should not have charged consumers above the market price of electricity — gives Ohioans a benefit of competitive markets for the future,” Ohio Consumers’ Counsel Bruce Weston said in a statement, as reported by the Dayton Daily News.

DP&L has already collected $250 million from customers under the plan, according to Weston. Customers will not see a refund in this amount because the Supreme Court does not allow retroactive refunds.

Matt Schilling, a PUCO spokesman, said the commission is reviewing the ruling.

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