Ohio Denies Need for AEP Ohio Power Plant Supported by Nonbypassable Charge, But Does Not Address Cost Allocation Issues

The Public Utilities Commission of Ohio has found that AEP Ohio has not proven a need for its proposed utility-owned Turning Point solar power generating asset, and while the decision therefore precludes AEP Ohio from building the plant via nonbypassable charge, PUCO declined to comprehensively address issues related to nonbypassable generation charges.

PUCO found that AEP Ohio and other supporters of the plant, "have not demonstrated that the Turning Point provision of the stipulation benefits ratepayers and the public interest as required by the second prong of our three-part test."

"The evidence offered by AEP-Ohio, as well as Staff, in support of the stipulation, indicates that there is not presently a need for the Turning Point project," PUCO said.

As such, PUCO did not find that, as part of AEP Ohio's long-term forecast, that the plant is needed, and since a need was not found, AEP Ohio cannot invoke a nonbypassable charge for building the plant.

However, while the PUCO's finding with respect to the plant's need resolved the nonbypassable cost issue, PUCO declined to address cost recovery issues more comprehensively.

"[T]he Commission finds that arguments regarding the cost recovery provisions of Sections 4928.143(B)(2)(c) and 4928.64(E), Revised Code, are premature at this point," PUCO said.

Notably, opponents of the nonbypassable charge had argued that the statute which requires all renewable energy compliance costs to be bypassable trumped other statutory provisions allowing for a nonbypassable charge for generation which is built to satisfy a need and which benefits all distribution customers. PUCO declined to rule on this issue.

PUCO did find, however, that a request for a nonbypassable charge does not have to be made in an electric security plan proceeding, as opponents of the charge had argued.

As to its determination regarding the need for the plant, PUCO found that, "the testimony provided by the signatory parties reflects that they do not project the need for additional in-state solar generation to arise until 2015."

"Even for that timeframe and beyond, the signatory parties have not demonstrated that the Turning Point project is necessary for AEP-Ohio to comply with its SER [solar energy] benchmarks," PUCO found.

"In fact, the signatory parties appear to concede that AEP-Ohio has no need for the Turning Point project. The signatory parties instead assert that there is a more general need for the Turning Point project because CRES providers or EDUs other than AEP-Ohio may need SRECs in 2015 or beyond. There is, therefore, no evidence that AEP-Ohio has a need for the Turning Point project to comply with its SER benchmarks under Section 4928.64(B)(2), Revised Code, or in any other respect. On the contrary, the record reveals that AEP-Ohio's 20-year purchase power agreement with the Wyandot solar facility is expected to provide sufficient SRECs to satisfy the Company's SER benchmarks throughout the forecast period. Consequently, there is no basis upon which we can find that the Turning Point provision of the stipulation benefits AEP-Ohio's ratepayers," PUCO said.

Case No. 10-501-EL-FOR