NOPEC must defend its right to be an electric energy aggregator in Ohio after announcing plans to lower electric bills for 550,000 customers by purging them from its rate plans, state regulators ruled Wednesday.
The Public Utilities Commission of Ohio directed NOPEC to show cause and explain why its certificate to do business should not be revoked by Sept. 28. The commission also waived rules so NOPEC could transition customers to other providers without a 90-day notice.
PUCO Chair Jenifer French said the PUCO wants NOPEC customers to benefit from lower electricity prices, which is why it ruled in favor of NOPEC in granting the waiver Wednesday. But the commission is still concerned about NOPEC’s plan to move so many customers at once.
It’s the latest development in a dispute that started Aug. 24, when NOPEC said it would temporarily drop about 97.5% of its electricity customers and pick them back up in spring 2023, something it had never done before.
Most of NOPEC’s customers were paying 12 cents per kilowatt-hour, while the standard service offer in FirstEnergy territories was between 6.7 and 6.8 cents. By dropping customers, NOPEC could save people money.
In its written decision, the PUCO said NOPEC’s plans “cast doubt upon” NOPEC’s ability to be an energy aggregator. The plan would lead to short-term savings but could also create long-term problems for electricity customers across Ohio, the PUCO wrote.
“The Commission is concerned that both NOPEC’s actions, prematurely returning customers to SSO (standard service offer) prior to the scheduled end of the aggregation program, and proposed actions, re-enrolling these same customers at some undefined point in the future when NOPEC deems that economic conditions are favorable, will adversely affect the wholesale generation providers who supply generation for the SSO service, resulting in higher prices for SSO customers,” the PUCO said in its written entry.
Dynegy, a wholesale electricity supplier, raised the same concerns in a complaint it filed against NOPEC in August. Dynegy said NOPEC’s plan could have a “significant and potentially devastating impact” on Ohio’s electricity market.
The PUCO has yet to rule on Dynegy’s complaint. Wednesday’s ruling came out of NOPEC requests to waive rules.
A PUCO spokesman said the ruling Wednesday doesn’t speak to the merits of the complaint that will be heard separately.
Ohio is an energy choice state where customers can choose their supplier. But if they don’t choose a supplier they get the local utility’s standard service offer, sometimes called the “price to compare” on electric bills.
Dynegy is responsible for 32% of the power sent to customers on FirstEnergy’s standard service offer and has similar agreements with AEP.
If hundreds of thousands of customers switch from NOPEC to the standard service offer, suppliers like Dynegy will need to produce or buy more energy than expected. Other energy companies have now filed motions in the complaint.
Dynegy argues that NOPEC’s action will “destabilize the competitive market” by switching a massive number of customers.
Companies also won’t know what to expect during the next slate of auctions, where companies compete for the right to sell FirstEnergy electricity. Dynegy said in its filing that uncertainty means higher bids, and the PUCO has now expressed similar concerns.
Dynegy asked PUCO to pause the transition and to investigate NOPEC’s decision, since NOPEC’s electricity rates have been higher since December, according to the complaint. It also asked for NOPEC’s certificate to do business not to be renewed.
NOPEC spokesperson Dave Jankowski said its policy is not to comment on active litigation. But NOPEC has filed a response to Dynegy’s complaint to the PUCO. In the filing, NOPEC said Dynegy is only protecting its own financial interests and trying to push out a competitor.
NOPEC argues that moving customers to the standard service offer will hurt Dynegy’s bottom line, since it needs to buy more power to serve the increase in customers, something Dynegy argues in its own filing.
And Dynegy’s sister company, Dynegy Energy Services, is a NOPEC competitor. It provides municipal aggregation to many places in Ohio, including Cincinnati and Fairlawn.
“This anti-consumer gamesmanship by Dynegy, if successful, would undeniably result in as many as 550,000 Ohio electric consumers paying higher prices for electric generation service solely to pad Dynegy’s profit margin,” NOPEC lawyers wrote in the filing.
Cincinnati’s electricity customers, getting energy through Dynegy, are paying just more than 5 cents per kilowatt hour, while Fairlawn customers pay just less than 5 cents, according to both city’s websites.
Dynegy Marketing & Trade and Dynegy Energy Services are both owned by the parent company Vistra. The company owns six Ohio-based power plants.