Legislation would force review of utility company projections

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(The Center Square) – A pair of Ohio state senators want to tighten scrutiny of utility company electric-usage projections, hoping to avoid expensive new power plants that may not be needed.

“The forecasts must be real,” State Sen. Mark Romanchuk, R-Ontario, said at a news conference Tuesday. “Forecast is not demand. A speculative project that may never use a single megawatt in Ohio should not become the excuse for costs that real customers are forced to pay.”

Romanchuk co-sponsored Senate Bill 457, the Electricity Forecast Integrity Act, to “encourage more accurate forecasting to prevent unnecessary spending and protect customers from rising electricity costs.”

The legislation would require utilities to provide proof of rising electricity demand before seeking new power plants that would be paid for by customers.

Utilities should not be allowed to turn “speculative demand” for power into

“guaranteed costs,” he said. “That should not be a radical idea.”

Under the legislation, utilities should have to show what is driving their forecasts and whether new production capacity is backed by “signed commitments” from customers, Romanchuk said.

“This legislation requires an independent, third-party review of utility forecast – not a rubber stamp, not a utility filing accepted at face value,” he said.  

The independent third-party would produce its own forecast of demand so the state’s Public Utilities Commission would not be limited to the utility company’s forecast alone.

“That matters, because the company that profits from building new infrastructure should not be the only party deciding how much infrastructure is supposedly needed,” Romanchuk said. “This is about stopping bad math from becoming bad policy. Customers should not be forced to pay today for demand that may never show up tomorrow.”

FirstEnergy, a major electricity company in Ohio, is reviewing the legislation, spokesman Brooke Conlan told The Center Square.

Greg Lawson, senior research fellow at the free market think tank, The Buckeye Institute, praised the bill Tuesday.

The institute usually opposes increased regulation, but it also supports data-centered solutions to public policy questions, Lawson said.

“We’re going to need to build transmission in Ohio,” he said. “We have data centers coming. We have advanced manufacturing coming. And we need to modernize the grid. There are a whole host of issues that we are talking about across the board. But the key thing is we need to make sure we are doing it smart and right and that we're not diffusing these costs onto other folks, other ratepayers.”