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Ohio PUC staff questions utility's need for 900 MW of renewables

Highlights

PUC staff says there is sufficient capacity

AEP subsidiary filed earlier for 400 MW of solar

Houston β€” Ohio Power 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.

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The American Electric Power subsidiary, which does business as AEP Ohio, is seeking approval from the Public Utilities Commission of Ohio to build out 500-MW of wind and 400 MW of solar capacity as part of a 2015 settlement of with the Sierra Club. If the commission rules the additional capacity is necessary, AEP Ohio would be allowed to charge customers through a non-by-passable rider to recoup its investments in the projects.

Timothy Benedict, a senior utility specialist with the commission, said in testimony filed Tuesday 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."

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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.

"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."

EVIDENTIARY HEARINGS BEGIN ON JANUARY 15

On September 19, Ohio Power filed a 2018 Long-term Forecast Report seeking a need determination for 900 MW of instate renewable projects.

Benedict said Ohio Power, in its long-term forecast, "conceded that 'PJM wholesale markets are adequately supplying capacity and energy to the AEP Ohio load zone.'"

On September 27, AEP Ohio filed a proposal with PUCO to support the development of 400 MW of new solar generation resources in Ohio by purchasing renewable power for AEP Ohio customers.

AEP Ohio told the commission a 300-MW and a 100-MW solar facility would be constructed in Ohio's Appalachian region in Highland County, and said the facilities could be operational by 2021, "pending regulatory approvals."

AEP Ohio told the commission at that time that it had "secured" two 20-year renewable energy purchase agreements for the solar power.

Benedict's testimony included the 400-MW of solar in his finding of "no need."

Evidentiary hearings on the Ohio Power's 2018 Long-Term Forecast Report will begin Tuesday, January 15, Matt Schilling, the PUCO spokesman said Thursday.

He said that hearing could last two weeks, followed by time to submit legal briefs and reply briefs.

The five-member commission's final decision on the case is not expected for several months after that. -- Taylor Kuykendall, S&P Global Market Intelligence

-- Jeffrey Ryser, newsdesk@spglobal.com

-- Edited by Derek Sands, newsdesk@spglobal.com