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Utility Says New State Law Does Not Require Divestiture Of Entitlements In Power Plant
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Dayton Power and Light Company (DP&L or AES Ohio) has said in comments to the PUC of Ohio that language in recent HB 15 does not require any electric distribution utility to divest its equity interest in Ohio Valley Electric Corporation (OVEC) or the EDU's contractual rights and obligations under the OVEC Amended and Restated Inter-Company Power Agreement (ICPA)
DP&L's comments were made in a proceeding in which AEP Ohio (Ohio Power Company) has sought approval for AEP Ohio to transfer its interests in Ohio Valley Electric Corporation (OVEC) to an affiliate of AEP Ohio
See background here
DP&L takes no position on AEP Ohio's application, but said that PUCO should not use the AEP Ohio proceeding to reach a conclusion that EDUs are required to divest their OVEC interests due to HB 15. DP&L said that PUCO may approve AEP Ohio's application without addressing this legal question which would impact other EDCs
As previously reported, HB 15 changed the definition of electric distribution utility to mean, "an electric utility that supplies at least retail electric distribution service and does not own or operate an electric generating facility."
AEP Ohio had cited this language, among other HB 15 provisions, in its application
However, DP&L argued that HB15's new definition of electric distribution utility does not prohibit an EDU's interest in OVEC
DP&L argued that, "Although Ohio electric distribution utilities hold equity interests in OVEC (e.g., AEP Ohio at 4.3%, AES Ohio at 4.9%, and Duke Energy Ohio, Inc. at 9%), none of them 'own or operate' OVEC’s electric generating facilities under R.C. 4928.01(A)(6)."
"OVEC -- itself -- owns and operates those facilities," DP&L said
"Nevertheless, even if an equity holder could be deemed to 'own' OVEC’s electric generating facilities under R.C. 4928.01(A)(6), the equity stakes of AEP Ohio, AES Ohio, and Duke Energy Ohio, Inc. are far too small to ascribe ownership for purposes of the statute. Elsewhere in Title 49, Ohio law does not presume 'control' of a utility until a person, directly or indirectly, holds the power to vote 20% or more of the total voting power of the utility. R.C. 4905.402(A)(1)," DP&L argued
DP&L further cited a prohibition in HB 15 that does not allow a utility to recover OVEC costs from customers, with DP&L arguing that such provision would be moot if the utilities are not permitted to retain their OVEC interests
DP&L said, "HB 15 assumed that the state’s electric distribution utilities would continue to maintain their interests in OVEC. Specifically, in repealing R.C. 4928.148, which authorized electric distribution utilities to recover their net costs (and credit their net revenue) relating to OVEC through Legacy Generation Resource riders, HB 15 stated: 'Beginning on the effective date of this section, the electric distribution utility shall not apply for, and the public utilities commission shall not authorize, any rider or cost recovery mechanism for a legacy generation resource.'"
"[I]f the General Assembly had intended to require electric distribution utilities to divest their interests in OVEC, then it would have expressly done so," DP&L said
DP&L further said that the EDUs' current interests in OVEC are consistent with the statute's retail market provisions, since the OVEC power is sold into the wholesale market and not applied to default service
AES Ohio said, "To be clear, AES Ohio does not raise these arguments out of a desire to maintain its equity interest in OVEC or its contractual rights and obligations under the ICPA. Instead, AES Ohio urges the Commission not to construe R.C. 4928.02(A)(6) to require electric distribution utilities to divest those interests, rights, and obligations, or else risk their status as electric distribution utilities. The Commission has long recognized practical barriers in achieving divestment of OVEC interests, and the Commission should not presume that the state’s other electric distribution utilities are similarly situated to AEP Ohio. It should also be mindful of the potential ramifications on utilities and their customers before ordering transactions that may not be reasonably achievable in the short term."
Case 12-1126-EL-UNC, 25-1039-EL-ATR
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November 25, 2025
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Reporting by Paul Ring • ring@energychoicematters.com
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