Executive Summary:
Ohio House Bill 66 seeks to dismantle key components related to “legacy generation resources” that were established by House Bill 6 (H.B. 6) of the 133rd General Assembly. Specifically, the bill aims to repeal section 4928.148 of the Revised Code, which provided a mechanism for the retail recovery of prudently incurred costs related to these legacy plants. Furthermore, H.B. 66 mandates that all revenues collected from customers through charges established under the now-repealed section 4928.148 be fully refunded. The bill also amends section 4928.01 of the Revised Code, primarily by removing the definition of “legacy generation resource” and “prudently incurred costs related to a legacy generation resource.”
Main Themes and Important Ideas/Facts:
1. Repeal of Legacy Generation Resource Provisions:
- The central objective of H.B. 66 is to repeal section 4928.148 of the Revised Code. This section, enacted as part of H.B. 6, provided a mechanism for electric utilities to recover “prudently incurred costs related to a legacy generation resource” through retail rates.
- The bill explicitly states its intent “to repeal the legacy generation resource provisions of H.B. 6 of the 133rd General Assembly.”
2. Definition of “Legacy Generation Resource” (to be repealed):
- The bill currently includes the definition of “legacy generation resource,” which it seeks to remove through the amendment of section 4928.01. This definition is crucial for understanding the scope of the provisions being repealed:
- “‘Legacy generation resource’ means all generating facilities owned directly or indirectly by a corporation that was formed prior to 1960 by investor-owned utilities for the original purpose of providing power to the federal government for use in the nation’s defense or in furtherance of national interests, including the Ohio valley electric corporation.” (Lines 396-401)
- The inclusion of “the Ohio valley electric corporation” specifically targets the financial support mechanisms put in place for these older coal-fired power plants.
3. Definition of “Prudently Incurred Costs Related to a Legacy Generation Resource” (to be repealed):
- Similarly, the bill seeks to repeal the definition of “prudently incurred costs related to a legacy generation resource,” which outlined the types of expenses that could be recovered:
- “‘Prudently incurred costs related to a legacy generation resource’ means costs, including deferred costs, allocated pursuant to a power agreement approved by the federal energy regulatory commission that relates to a legacy generation resource, less any revenues realized from offering the contractual commitment for the power agreement into the wholesale markets, provided that where the net revenues exceed net costs, those excess revenues shall be credited to customers. Such costs shall exclude any return on investment in common equity and, in the event of a premature retirement of a legacy generation resource, shall exclude any recovery of remaining debt. Such costs shall include any incremental costs resulting from the bankruptcy of a current or former sponsor under such power agreement or co-owner of the legacy generation resource if not otherwise recovered through a utility rate cost recovery mechanism.” (Lines 402-417)
- This definition clarifies the specific costs associated with legacy plants that were eligible for recovery through customer charges under the repealed section.
4. Termination of Existing Recovery Mechanisms:
- Section 4 of the bill explicitly terminates any existing mechanisms established under the previous version of section 4928.148 for the retail recovery of prudently incurred costs related to legacy generation resources:
- “(A) Any mechanism for retail recovery of prudently incurred costs authorized and established pursuant to division (A) of section 4928.148 of the Revised Code as that section existed prior to the effective date of this section is hereby terminated.” (Lines 438-442)
- Furthermore, it prohibits the revival or reinstitution of any cost recovery mechanisms related to these legacy facilities that were in effect before the passage of H.B. 6:
- “(B) Any mechanism for retail recovery of costs for all generating facilities owned directly or indirectly by a corporation that was formed prior to 1960 by investor-owned utilities for the original purpose of providing power to the federal government for use in the nation’s defense or in furtherance of national interests, including the Ohio Valley Electric Corporation, that was authorized under section 4928.143 of the Revised Code, or any other section of the Revised Code, and that was in effect on or before the effective date of H.B. 6 of the 133rd General Assembly shall not be revived, reimposed, reestablished, or in any way reinstituted as a result of this act, or Public Utilities Commission order, decision, or rule, and no amount, charge, mechanism, or rider related to such mechanism may be assessed or collected from customers.” (Lines 443-457)
5. Mandated Customer Refunds:
- A significant aspect of H.B. 66 is the requirement for full refunds to customers of all revenues collected through the charges established under the now-repealed section 4928.148:
- “Upon the effective date of this section… the full amount of revenues collected from customers through an amount, charge, mechanism, or rider established under section 4928.148 of the Revised Code, as that section existed prior to the effective date of this section, shall be promptly refunded to customers from whom the revenues were collected.” (Lines 458-464)
- The bill specifies that these refunds must be allocated proportionally to the customer classes from which the revenues were originally collected:
- “Refunds paid to customers shall be allocated to customer classes in the same proportion as originally collected.” (Lines 465-467)
6. Amendment to Section 4928.01:
- The bill amends section 4928.01 of the Revised Code, which provides definitions for various terms used in the chapter on electric utilities. The primary purpose of this amendment, as indicated by the strike-through of the existing language and the introduction of the new text, is to remove the definitions of “legacy generation resource” (formerly division (A)(41)) and “prudently incurred costs related to a legacy generation resource” (formerly division (A)(42)).
- The bill also includes minor amendments to other definitions within this section, but these appear to be primarily for renumbering and do not fundamentally alter their meaning. For example, the definition of “Green energy” is moved from (A)(43) to (A)(41) due to the removal of the legacy generation definitions.
Conclusion:
House Bill 66 represents a direct effort to reverse key financial support mechanisms for legacy generation resources (specifically targeting entities like the Ohio Valley Electric Corporation) that were established under H.B. 6. By repealing section 4928.148 and amending section 4928.01, the bill aims to eliminate the legal basis for utilities to recover costs associated with these plants through customer rates. The mandatory refund provision underscores the intent to rectify the financial impact of these previously enacted measures on Ohio electricity consumers. The passage of this bill would significantly alter the regulatory landscape for the affected power generation facilities and impact the electricity bills of Ohio customers.