Senate Public Utilities Committee BriefingMarch 12, 2013

Presented by

Todd A. Snitchler, Chairman

Ohio Alternative Energy Portfolio Standard

25% by 2025 • 25% of retail electricity sold by:

– Ohio’s electric distribution utilities – American Electric Power, Dayton Power & Light, Duke Energy, and First Energy, or;

– Competitive electric service companies

• Must be generated from alternative sources:

– Renewable energy sources

– Advanced energy technology

SB 22125% (of total kWh) by 2025• Half may be from advanced energy resources• At least half from renewable, .5% solar• At least half of renewable through facilities

located in the state, remainder deliverable• Compliance payments/forfeitures• Cost of compliance not to exceed three percent

of otherwise acquired

Renewable Portfolio Standard Policies..www.dsireusa.org / February 2013.

29 states,+ Washington DC and 2

territories,have Renewable Portfolio

Standards(8 states and 2 territories have renewable portfolio

goals).

29 states,+ Washington DC and 2

territories,have Renewable Portfolio

Standards(8 states and 2 territories have renewable portfolio

goals).

Renewable Portfolio Standard Policies with Solar / Distributed Generation Provisions.www.dsireusa.org / February 2013.

16 states,+ Washington DC have Renewable

Portfolio Standards with Solar and/or

Distributed Generation provisions

16 states,+ Washington DC have Renewable

Portfolio Standards with Solar and/or

Distributed Generation provisions

By end of year

Renewable Energy

Solar Energy

2009 0.25% 0.004%

2010 0.5% 0.01%

2011 1% 0.03%

2012 1.5% 0.06%

2013 2% 0.09%

2014 2.5% 0.12%

2015 3.5% 0.15%

2016 4.5% 0.18%

2017 5.5% 0.22%

2018 6.5% 0.26%

2019 7.5% 0.3%

2020 8.5% 0.34%

2021 9.5% 0.38%

2022 10.5% 0.42%

2023 11.5% 0.46%

2024 + 12.5% 0.5%

Benchmarks

0%

2%

4%

6%

8%

10%

12%

2009

2011

2013

2015

2017

2019

2021

2023

Renewable

Solar

Alternative Energy Benchmarks (including advanced)

Renewable Energy Credits• New Ohio Renewable Energy Credit (REC) trading market

created by new law in 2009

• 1 REC = 1 mWh of electricity generated

• Utilities may own renewable facilities or purchase RECs to meet the renewable portion of the standard

• PUCO certifies resources; established tracking systems will issue and track RECs

• RECs have a 5-year lifetime following their acquisition

• Energy and RECs may be sold as separate commodities

Compliance PaymentsUtilities and electric service companies subject to compliance payments if annual renewable and solar benchmarks are not met.

Non Solar:•Started at $45/mWh in 2009•2012 compliance payment was $47.56/MWh

Solar:•$450/mWh in 2009 and declines over time•2012 compliance payment was $350/MWh for solar

Exceptions: force majeure; 3% cost cap

Certification Application• REN certification is not mandatory for any renewable project, but

necessary to create RECs eligible for Ohio utility compliance• No fee to apply• May certify facilities prior to commercial operation • Application will focus on:

– Resource/technology utilized– Placed in-service date– Deliverability to the state

• One-time review (unless significant change to facility in future)• Interested person may seek intervention and request hearing on

certification• Certification status will be conveyed to applicable attribute tracking

system

Facilities Certified Since June 2009

Wind Momentum

Federal PTC (Production Tax Credit)

State Renewable Portfolio Standards (RPS)

Technological Improvements

Price Volatility for Other Fuels (i.e., Natural Gas)

Interest in Green Power / Clean Energy Sources

Climate Change / Energy Independence 14

Wind farms in Ohio can help provide renewable resources to meet Ohio’s Alternative Energy Portfolio Standards

But Also:A small wind generator owned by a retail customer may enable the customer to use a renewable resource to offset his electrical demand and potentially earn a credit for net metering on his

electric bill.

Qualified Biomass Resources• Biogas: landfill methane gas or anaerobic digestion

of organic materials such as animal waste, bio-solids, food waste, agricultural crops and residues, solid waste

• Agricultural crops, tree crops, crop by-products and residues

• Wood and paper manufacturing waste• Forestry or vegetation waste• Algae

Ohio EDU 2009 - 2011 Requirements and Performance under the Alternative Energy Portfolio Standard (AEPS)ORC 4928.64

Note: Contents based on Companies' annual compliance filings - numbers may be adjusted following Commission review & decision

2011 Renewable Requirement - Net of Solar Solar RequirementObligation (MWHs) Performance (MWHs) Obligation (MWHs) Performance (MWHs)

AEP-Ohio Columbus Southern Power 186,036 186,036 5,754 5,754Ohio Power 235,108 235,108 7,271 7,271Total AEP-Ohio 421,144 421,144 13,025 13,025

Dayton Power & Light 109,190 109,190 3,337 3,337

Duke - Ohio 155,338 155,338 4,804 4,804

First Energy Cleveland Electric Illuminating 124,773 124,773 4,428 4,428Ohio Edison Company 161,708 161,708 5,707 5,707Toledo Edison Company 65,830 65,830 2,338 2,338Total FE (Ohio EDUs) 352,311 352,311 12,473 12,473

EDU TOTALS 1,037,983 1,037,983 33,639 33,639

* CRES numbers not portrayed on this summary sheet* Solar compliance shortfalls addressed via force majeure requests* 2010 Solar Obligation includes compliance shortfalls from 2009* CONTENTS BELIEVED TO BE CORRECT, BUT INTERESTED PARTIES SHOULD REFER TO APPLICABLE ANNUAL COMPLIANCE FILINGS

Advanced Energy Resources• Clean coal• Advanced Nuclear• Fuel cells• Customer co-generation• Advanced solid waste conversion• Utility generation plant or demand-side management

efficiency measures• Uprated capacity of an existing electric generating facility

resulting from the deployment of advanced technology • Any new, retrofitted, refueled or repowered generating

facility in Ohio• Note: RECs are not created from advanced resources

Energy Efficiency and Demand Reduction Benchmarks - SB 221 (OAC 4901:1-39)

• Establishes requirements and processes to determine specific benchmarks for energy efficiency and peak reduction programs

• Establishes energy usage and demand baselines for measuring annual energy savings and demand reductions

• Provides mechanisms by which investments achieve energy savings and demand reductions by mercantile customers in their own facilities and can be recognized in electric utility programs as contributing to specific levels of energy savings and demand reductions.

Senate Bill 315 and EE

Gov. Kasich signed June 2012:

•CHP and waste energy recovery can be counted toward the state’s Energy Efficiency requirements.•Waste energy recovery facilities qualify as renewable energy sources under Ohio’s Alternative Energy Portfolio standard.

Electricity Consumption in Investor-Owned Electric Utility Service Areas in Ohio

October 2008 – December 2009

Energy Efficiency Requirement

•22% + Reduction by 2025•Could result in annual usage at 13.8 million mWh below 2007

Peak Demand Reduction Standard

•7.75% by 2018•Tariffs and special contracts available to commit the demand reduction•Customers enrolled in RTO demand response programs are counted if customer commits the peak demand reduction

Peak Demand Reduction and Energy Efficiency Benchmarks

Peak Demand Reduction and Energy Efficiency Benchmarks

Each Electric Distribution Utility filed a report identifying the 2009 baselines and benchmarks.

Each Electric Distribution Utility filed a program portfolio plan for energy efficiency and peak reduction programs.

Upon approval of the program portfolio plan, an Electric distribution utility may seek cost recovery.

Each year, on April 15, the Electric Distribution Utility must file a portfolio status report that demonstrates its compliance status with its benchmarks and provides an assessment of its performance.

Mercantile Customer Applicationsto commit Energy Efficiency and

Peak Demand ReductionOhio Administrative Code 4901:1-39-05(F) Permits a mercantile customer to file individually or jointly

with an electric utility, an application to commit the customer’s existing demand reduction, demand response, and energy efficiency programs for integration with the utility’s program

Expectation the mercantile customers were to be exempt from the EE/PDR Rider of the tariff they are taking service

Pilot Program adopted by the Commission for ease of application and administration

Energy Efficiency Historic Mercantile Applications

Total filed to date* 1585

Total Mercantile Cases Complete 1507

Total Mercantile Cases Suspended 9

Total Mercantile Cases Pending 69

*As of 2/15/2013

Ohio EDU 2009 & 2010 Requirements and Performance under the Energy Efficiency and Peak Demand Reduction program requirements, ORC 4928.66Note: Contents based on Companies' annual compliance filings - numbers may be adjusted following Commission review & decision

2009 Energy Efficiency Requirement Peak Demand Reduction RequirementObligation (MWHs) Performance (MWHs) Obligation (MWs) Performance (MWs)

* AEP-Ohio Columbus Southern Power 60,000 121,000 40 24Ohio Power 77,000 132,000 46 366Total AEP - Ohio 137,000 253,000 86 390

Dayton Power & Light 43,919 40,442 29.6 168.4

Duke - Ohio 68,233 293,023 44.6 97.4

** First Energy Cleveland Electric Illuminating 58,155 207,795 42 72.1Ohio Edison Company 76,783 102,933 53 73.5Toledo Edison Company 31,349 39,921 20 150.3Total FE (Ohio EDUs) 166,287 350,649 115 295.9

EDU TOTALS 415,439 937,114 274.7 951.7

2010Obligation (MWHs) Performance (MWHs) Obligation (MWs) Performance (MWs)

AEP-Ohio Columbus Southern Power 104,000 163,000 71 122Ohio Power 124,000 143,000 81 382Total AEP-Ohio 228,000 306,000 152 504

Dayton Power & Light 71,717 101,061 50.3 74.6

Duke - Ohio 109,536 310,755 33.2 40.2

** First Energy Cleveland Electric Illuminating 150,576 273,076 71.7 71.7Ohio Edison Company 197,959 164,365 90.2 73.3Toledo Edison Company 81,204 129,964 35.2 148.9Total FE (Ohio EDUs) 429,739 567,405 197.1 293.9

EDU TOTALS 838,992 1,285,221 432.6 912.7

* Utility reports that PDR Obligation (benchmark) has been met because actual peak demand did not exceed baseline minus 1%.** 2009 Energy Efficiency Obligations (Benchmarks) were amended to zero by Commission order. 2009 and 2010 performance values include projects not yet approved by the Commission. Ohio Edison 2010 benchmarks were amended to actual levels achieved.

Energy Efficiency Requirement Peak Demand Reduction Requirement

To support sound energy policies that provide for the

installation of energy capacity and transmission

infrastructure for the benefit of the Ohio citizens,

promoting the state’s economic interests, and

protecting the environment and land use.

Ohio Power Siting BoardMission Statement

Ohio Power Siting BoardMember Agencies

OPSB Jurisdiction

Definition of “Major Utility Facility:”•A generating plant of 50 megawatts or more

•An electric transmission line of 125 kilovolts or greater

•Intrastate gas or natural gas transmission line capable of transporting gas at or greater than 125 pounds per square inch of pressure (does not include production, gathering or liquids lines)

HB 562 (2008)

• Gave the Board additional oversight regarding commercial wind farms

• Wind facilities greater than 5 MW

• This bill also directed the Board to adopt certification rules for the construction, operation and maintenance of wind-powered electric generation facilities

• The rules outline requirements for aesthetics, setback, noise levels, ice throw, blade sheer and shadow flicker   

OPSB Benefits• One-Stop Siting Process• Timely action: Approximately 6 to 12 months for applications, with

statutory time mandates; accelerated schedules an option under certain circumstances

• Regulatory certainty: process is known and practiced• Sole jurisdiction: local and public participation welcome in the

process, but sole decision rests with the state (OPSB)• Our siting process is fair and efficient and has been put forth as an

example for others to follow• Having seen our success, several states and countries have

adopted new siting legislation modeled after Ohio’s statute

OPSB Electric Generation Applications

(1998-2013)

Generation by Facility Type Number of Active Cases Capacity (MW) Estimated Costs

Coal (i.e. IGCC) 3 1,540 $2,800,000,000

Cogeneration-Waste Heat 3 338 $477,271,197

Combined-Cycle 8 5,978 $3,296,000,000

Compressed Air 1 2,700 $1,650,000,000

Simple-Cycle 11 4,585 $1,537,190,000

Wind* 22 1,886 $3,082,780,000

Facility Totals 48 17,027 $12,843,241,197

* Includes Amendment Applications