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The Trade Off

On March 31, PUCO ( Public Utilities Commission of Ohio ) approved proposals by AEP and FirstEnergy to guarantee income for certain power plants, accepting their arguments that the seven coal plants and one nuclear plant should be subsidized by ratepayers because the benefits outweigh the potential costs. The decision means ratepayers will be responsible for any costs related to keeping the plants open through May 2024.

 

Basically we have to pay more for our electric because they don’t have enough money to run them right. It is a bailout, one that will affect the consumer more directly than some bailouts in the past.  This controversial deal keeps two high-cost plants running. FirstEnergy says its 1.9 million residential customers will pay an additional $3.25 a month for 750 kilowatt-hours for the first 31 months. Commercial and industrial users will pay more. But bills should start to shrink after 31 months. Critics say the bills could jump even higher, perhaps by as much as $11.46 a month over the next eight years.

 

There are a lot of critics. They range from renewable energy providers, other utilities, the state’s largest industrial electric customers, environmental groups, the Ohio Manufacturers’ Association and the AARP. However there is one very strange supporter of this proposal; the Sierra Club. No you didn’t read that wrong, yes the Sierra Club, the widely outspoken environmental organization.

 

Oh and did I mention these were coal fired plants?

 

Yes the Sierra Club is supporting a deal that keeps two huge coal fired electric plants in business until 2024. Why? Money and business is why. You see Sierra Club has a little deal with AEP on the side;

  • AEP closing or converting to natural gas three coal-fired power generating stations in Ohio totaling 1,500 megawatts by 2030.
  • AEP bringing 900 megawatts in renewable energy projects to Ohio by 2020, including 400 megawatts of solar and 500 megawatts of wind power, with a preference for solar sited in southeast Ohio. (Ohio now has just more than 100 megawatts of installed solar). The eastern part of the state is the historical home of coal production. The Sierra Club said it wants the area to become "a solar manufacturing hub."

 

So you see, Sierra Club wants to start a solar hub and their deal with AEP was put in place before this deal. Since this renewable package is important to them they had to support AEP in this. They had to trade off a lesser evil for the greater good. If something happened to AEP well then their plans would fall though.

 

So it seems no matter what you stand for, sometimes you have to make the trade off, one thing for another. What do you think of all this? The proposal approval? The unlikely alliance between Sierra Club & AEP? Let us know, comment below!

 

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