State Energy Regulator Seeking Audit Of OVEC Coal Plants

May 10, 2021

The Public Utilities Commission of Ohio is seeking an independent company to conduct an audit of two coal plants owned by the Ohio Valley Electric Corporation, or OVEC. The plants receive hundreds of millions of dollars in subsidies from Ohio ratepayers.

OVEC is a corporation partially owned by Ohio's large utilities, including AEP, Dayton Power & Light, and Duke Energy. The corporation owns two coal companies; Kyger Creek in Gallia County and Clify Creek in Madison, Indiana.

In 2019, lawmakers approved HB6 which included a provision that allowed a cost recovery mechanism for OVEC by collecting up to $1.50 in subsidies a month from every ratepayer in the state. This can amount to hundreds of millions of dollars in the course of 10 years.

According to the PUCO's request seeking to hire an independent auditor, the commission is "required to determine the prudence and reasonableness of the actions of EDUs with LGR ownership interests during years 2021, 2024, 2027, and 2030."

Neil Waggoner, Sierra Club Ohio Chapter senior campaign representative, which advocates against coal production, says the money stream from ratepayers means less accountability for the plants that struggle in the energy market.

"If that's guaranteed, where's the push to actually make them deal with these debt-laden plants? There is none, none whatsoever," says Waggoner, who adds that there are not enough consumer protections attached to the audit.

Supporters say the coal plants help diversify Ohio's energy portfolio and the subsidies help maintain jobs in the region.

The new terms of the audit were spelled out in HB6. However, AEP notes that an audit of the OVEC plants is a common occurrence that happened before HB6 was passed.

"The OVEC plants operate efficiently and the auditors have not made findings of imprudence or mismanagement. OVEC continues to provide Ohio customers with reliable generation service and OVEC employees have worked hard to reduce operating costs," Scott Blake, AEP Ohio media relations and policy communications manager, wrote in a statement.

The OVEC subsidies were just a portion of HB6, which also bailed out nuclear power plants, cut renewable energy standards, and eliminated energy efficiency standards.

Federal investigators say HB6 was passed with the help of a $61 million bribery scheme in which an unnamed utility, believed to be FirstEnergy, funneled the money to a dark money group called "Generation Now." Investigators say "Generation Now" was controlled by former House Speaker Larry Householder (R-Glenford) who allegedly used the money to help his allies win local elections, become house speaker, and push for the passage of HB6.