OHA- The Ohio Hospital Association

Ohio Energy Deregulation and Opportunities
Natural Gas Electricity

SB 221 Rate Cases Settling
S.B. 221 took effect last July 2008 and resulted in the filing of electric rate cases by Ohio’s four major electric utilities. The bill required Ohio’s electric utilities to either file “electric security plans” that would establish somewhat cost-based rates, or permit the utilities to file “market option plans” in which rates would move to market-based rates.

The PUCO issued rules as required by SB 221, although some of the rules are not final. The rules and comments filed by parties can be found on the PUCO website at www.puco.ohio.gov/. AEP, Dayton Power and Light, Duke Energy Ohio, and FirstEnergy filed proposals during the second half of 2008, and three of those cases have been resolved through PUCO action. See the following links for more information.

         American Electric Power application:
         o     Overview by Bricker & Eckler
         o     AEP energy efficiency subsidies Web site
         o     PUCO Order adopting Electric Security Plan
         o     June 30, 2009 Webinar

     Duke Energy Ohio application:
         o     Overview by Bricker & Eckler
         o     PUCO Order adopting Electric Security Plan

        FirstEnergy application:
         o   Overview by Bricker & Eckler
         o Settlement
        o Settlement summary by Bricker & Eckler
         o Overview of energy collaborative

       Dayton Power and Light application:
         o  Overview in DP&L application
         o  Settlement

Background
OHA has been active in energy issues dating to at least the 1970s energy crisis, when it obtained a government grant to assist hospitals with energy conservation projects. OHA remains active in energy conservation through its support of the U.S. EPA Energy Star program and related conservation and pollution prevention efforts in Ohio.

OHA formed a natural gas purchasing group in 1998, and restructure its natural gas program in 2004. OHA's current endorsed natural gas supplier is Stand Energy Corporation.

OHA has been involved in state electric policy-making since legislation was enacted to deregulate the Ohio electric market in 1999. Since then, OHA has intervened in major electric cases before the Public Utilities Commission of Ohio and negotiated with electric utilities as a part of the regulatory process. OHA has been actively involved in implementation of S.B. 221, related PUCO rulemaking, and the electric security plan and market rate offer cases that will be filed with the PUCO.

Natural Gas
OHA has had a natural gas program since 1998. OHA's energy committee selected Stand Energy Corporation based on its reputation, familiarity with hospital operations, pricing and willingness to use OHA's Master Agreement. Hospitals are invited to contact OHA or Stand Energy Company for further information. At Stand Energy Corporation, contact Stacee Dover or Terri Leach at 800-598-2046 or OHA@stand-energy.com. Contact Rick Sites at OHA if your hospital is interested in a free comparison of natural gas supply offers.

Stand Energy Company
Natural Gas Procurement Process (PowerPoint)
Public Utilities Commission of Ohio
NYMEX Natural Gas Prices (free registration may be required to access data)
National Hurricane Center
Energy Information Administration

Electric Utilities

Natural Gas Market, and Related News

Weekly Stand Energy Natural Gas Update
OHA’s endorsed natural gas supplier issues a weekly update to its customers.

Natural Gas Prices Rattling around $4
Natural gas prices still are rattling around the $4 mark and storage is above historical levels. NYMEX gas is not selling above $7 until fall of 2010.

2009 Hurricane Season Forecasts Update
The National Oceanic and Atmospheric Administration's Weather Service Climate Prediction Center announced in late May that there could be as many as three major hurricanes during this year's Atlantic hurricane season. Forecasters at the Center said there's a 70% chance of having nine to 14 named storms, of which four to seven could become hurricanes. One to three of those could become major hurricanes, defined as Category 3, 4 or 5 storms. The Center called for a 50% probability of a near-normal season, a 25% probability of an above-normal season and a 25% probability of a below-normal season.

Colorado State University Lowers Hurricane Prediction
Hurricane forecasters at Colorado State University in early June lowered its prediction for the Atlantic hurricane season to below that expected for an average season. Because of cooler-than-normal ocean temperatures and a better chance for a weak El Nino for a large portion of the season, CSU’s William Gray and Phil Klotzbach now forecast 11 named storms (down from 14) through Nov. 30. Five of those will become hurricanes, with two predicted to be major ones. The CSU team estimates a 28% chance a hurricane will strike the East or Gulf Coast—below the average.

GAO Warns of Inadequate DOE R&D Budget
The General Accountability Office issued a report finding the Department of Energy’s research and development budget fell from $6 billion in 1978 to $1.4 billion in 2008. The GAO concluded that DOE’s energy R&D funding alone will not be sufficient to deploy advanced technologies, and that coordinating energy R&D with other Federal energy-related programs and policies will be necessary. Furthermore, other governments and the private sector will have an important role in developing and deploying advanced energy technologies that could result in a change of the energy portfolio.

Global Warming Report: Lots of Precipitation
Environment America issued a report in early December that finds climate change throughout the United States. As applicable to Ohio, the report finds that "extreme precipitation" events have increased during the period beginning in 1948, and that trend is expected to continue. The report attributes the situation to global warming. Find the report with maps and tables.

Demand Response initiatives could lead to significant savings: At a recent Demand Response Symposium, Ohio and Illinois representatives indicated that certain customers could save as much as 25% off electricity costs through effective demand response (DR) programs. DR programs typically focus on curtailing load during peak periods.

Deja Vu: Deregulated States Pay More for Electric: A study by Carnegie Mellon found that customers in deregulated states pay 2 to 3 cents per kilowatt hour more than customers in regulated states, according. The study is titled "Electricity Prices and Costs Under Regulation and Restructuring."

Energy Management Initiatives and Resources

Contact
Rick Sites
General Counsel and Senior Director of Health Policy, Ohio Hospital Association
Executive Director, OHA Solutions and Senior Director of Health Policy
ricks@ohanet.org