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Sierra Club, Dynegy push PUCO for rehearing on Ohio PPA plans

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Sierra Club, Dynegy push PUCO for rehearing on Ohio PPA plans

TheSierra Club and Dynegy Inc.are among several intervenors pushing Ohio regulators to reconsider theirapproval of generation subsidy plans for AEP Ohio and 's utilities.

ThePublic Utilities Commission of Ohio voted unanimously March 31 to modified for nearly 6,000 MW of primarily coal-fired generation owned by competitivesubsidiaries of American ElectricPower Co. Inc. and FirstEnergy. Customers will receive rate creditsor charges to offset the costs for AEP Ohio and FirstEnergy's Ohio utilities topurchase the power and bid it into PJMInterconnection LLC capacity markets.

Althoughthese PPAs are now subject toFERC approval and AEP has hinted at its generation assets, opponentsof the plans are asking the PUCO to rehear the cases.

TheSierra Club, which signed onto AEP's final PPA plan (Case Nos. 14-1693-EL-RDR, 14-1694-EL-AAM), continuesto oppose FirstEnergy's proposal and contends the PUCO ruling in the case is "unlawfuland unreasonable." (Case No. 14-1297-EL-SSO)

Inits application for rehearing filed April 29 with the PUCO, the Sierra Clubargues that FirstEnergy failed to prove that its retail rate stability rider "wouldprovide a net benefit to customers."

"[T]hecommission relied on forecasts and a projection that were unreliable, outdated,and already proven wrong," the application states. "[T]he commissionrelied on a finding that Rider RRS would provide a net credit to customers of$256 million that is unreasonable and against the manifest weight of theevidence."

TheSierra Club also argued that "there is no evidence" that customerswould face retail rate volatility in the absence of the rider and "thereis no evidence in the record that the plants would shut down without Rider RRS."

FirstEnergy,as part of its proposal, said the rider would ensure that the 2,210-MWW.H. Sammis coalplant and 908-MW Davis-Bessenuclear plant would continue to provide "" generation for the state ofOhio.

Inits own request for rehearing, FirstEnergy said it would like to apply creditsor charges on customer bills every month, with quarterly and annual reviews byOhio regulators.

Dynegy,a vocal opponent ofpower plant subsidies, has submitted applications for rehearing in both cases.

Theriders do not benefit ratepayers and are not in the public interest, accordingto Dynegy.

Thepower provider said the commission's opinion and order was "unreasonableand unlawful" since it did not require competitive bidding as part of thePPA process and provides "insufficient oversight."

Inaddition, Dynegy said the PUCO lacks the legal authority to approve the ridersand failed to "substantively address concerns that the PPA Rider threatenscompetitive markets and impedes the development of new sources of generation inOhio."

Dynegyalso contends that the PUCO's findings that the riders promote retail ratestability, as well as grid reliability or fuel diversity, were unreasonable andunlawful. The PUCO also "ignored evidence" that theplants that AEP and FirstEnergy are trying to protect are not facing closure,Dynegy asserted.

ThePJM Power Providers Group and Electric Power Supply Association, as well as theRetail Energy Supply Association, Mid-Atlantic Renewable Energy Coalition andPower4Schools, also have filed applications for rehearing.

AEPOhio is the trade name of OhioPower Co.