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Association of Energy Engineers – SW Ohio

Association of Energy Engineers – SW Ohio . PJM and Ohio Regulatory changes - 2013. Regulatory compact. Electric Utilities granted a monopoly franchise from the state

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Association of Energy Engineers – SW Ohio

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  1. Association of Energy Engineers – SW Ohio PJM and Ohio Regulatory changes - 2013 Howard Petricoff Vorys, Sater, Seymour & Pease LLP

  2. Regulatory compact • Electric Utilities granted a monopoly franchise from the state • Electric Utilities build, own, operate and maintain electric service network sufficient to supply service to all customers in their service territory • Generation • Transmission • Distribution • Rates and terms of service set by Public Service Commission • Reasonable return on investment so long as it is • Reasonable Level of Service • Used and Useful Howard Petricoff Vorys, Sater, Seymour & Pease LLP

  3. Rates set under cost of service • Test Year Inventory of investment – Rate Base • Test Year accounting of costs • Operation and maintenance • Administrative and Executive • Return of and on the Rate Base Investment. • Allocation of Costs based on “cost causation” • Public Service Commission sets rates and terms of service by type Howard Petricoff Vorys, Sater, Seymour & Pease LLP

  4. Regional transmission associations • Energy Policy Act creates Regional Transmission Association • Co ordinate dispatch among utilities • Assure regional service stability • Planning on a regional basis • Markets • Real Time • Next Day & Beyond • Capacity • States Decide whether participation in mandatory / Rate impact Howard Petricoff Vorys, Sater, Seymour & Pease LLP

  5. Pjm interconnection • All four of Ohio’s major investor owned utility groups belong • Operates the grid – though ownership remains with the utilities • All additions of both sources and sinks and approved • Entrant pays cost to modify the system • Planning functions • generation • transmission • conservation • Markets • marginal pricing models • clearing house for all load serving entities Howard Petricoff Vorys, Sater, Seymour & Pease LLP

  6. Developments at pjm • Base Residual Auction – Conducted three years in advance • All generators must bid or be pledged to FPP • Conservation (Demand Response) is a bid • Constrained areas – priced separately • Base Residual Auction for service year 2015-2016 was $59 down from $136 per Megawatt Day • Cost to Load Serving Entities & End Users Down • Revenue to Generators Down Howard Petricoff Vorys, Sater, Seymour & Pease LLP

  7. Ohio regulation changes – pjm capacity • AEP Ohio Cases No. 10-2929-EL-UNC and 11-346-EL-SSO • State Compensation Plan for Capacity • Applies only to FRR utilities • AEP Ohio • Ohio Power • Columbus Southern Power • Duke Energy Ohio • AEP Ohio now receiving the difference between RPM Capacity cost and $188.88 per MW/d - $1 MWh straight charge and deferral of the rest. • Duke Energy Ohio – Petition for like program – case pending Howard Petricoff Vorys, Sater, Seymour & Pease LLP

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