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Ohio regulatory staff says AEP has not demonstrated need for renewables projects


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Ohio regulatory staff says AEP has not demonstrated need for renewables projects

Ohio Power Co. has not demonstrated a need to construct additional electricity generation resources to justify 900 MW of renewable energy projects the company has proposed, state regulatory staff said in recently filed public testimony.

The American Electric Power Co. Inc. subsidiary, which does business as AEP Ohio, is seeking approval from the Public Utilities Commission of Ohio to build out wind and solar capacity as part of a 2015 settlement agreement with the Sierra Club. If the commission rules the additional capacity is necessary, AEP Ohio would be allowed to charge customers through a nonbypassable rider to recoup its investments in the projects.

Timothy Benedict, a senior utility specialist with the commission, said in testimony filed Jan. 8 that there is enough electric generation supply to meet the needs of AEP Ohio's customers, so the commission staff did not find it necessary to study the specific merits of the company's proposed wind and solar projects.

AEP Ohio has pointed to environmental benefits and a survey in which its customers expressed a preference for shifting toward renewable energy.

"The facts we have presented make it clear that our state needs renewable generation resources to make Ohio even more attractive to companies looking to come here, address customer demand for renewable energy, and spark the development of a clean energy economy in Ohio," AEP Ohio said in a statement. "We hope [the commission comes] to the conclusion that our state needs renewable resources as part of the generation mix that supplies all of our customers with the energy they need."

The commission staff said Ohio Power is conflating customer preference with need and it does not believe that the purported benefits constitute the designation of need.

Approving the designation of need could discourage other initiatives in Ohio aimed at facilitating customers who want to obtain energy consistent with their preferences, staff warned.

"The company provides insufficient evidence that customer preferences are not being adequately met," Benedict said. However, members of the commission "will ultimately decide whether or not to broaden the definition of need."

While AEP's proposal has been supported by environmental groups, a renewable energy organization and in comments from the public, it has also been fought by a diverse group of opponents including the coal sector, a solar company, a group of manufacturers and the state's consumer advocate.