Bankruptcy could upend DP&L-industry power plant pact

Energy industry players fear that a bankruptcy could upend the operation of power plants in which Dayton Power & Light has an interest, leaving customers — including potentially Dayton-area customers — having to pay more to continue the operation of those plants.

In light of those risks, environmental groups are seeking to reopen part of an electric security plan that Ohio regulators approved for DP&L last year.

The Ohio Valley Electric Corporation (OVEC) — a cooperative corporation which includes DP&L, AEP, Duke, and FirstEnergy Solutions, among others — filed a complaint to the Federal Energy Regulatory Commission in March to prevent FirstEnergy Solutions from withdrawing from financial obligations under an OVEC pact for joint operation of two 60-year-old coal-fired power plants.

RELATEDNew DP&L plan raises rates, state office says

The Office of Ohio Consumers’ Counsel expressed similar concerns to federal regulators.

Industry players widely expected that FirstEnergy’s competitive generation subsidiary FirstEnergy Solutions would file for Chapter 11 bankruptcy protection, which it did early in April.

OVEC expressed concern that a withdrawal by FirstEnergy Solutions’ could leave utility company members — and potentially customers — with “hundreds of millions of dollars over the remaining life of the contract,” according to an OVEC complaint.

MORE: Trump tariffs could help, hurt these area companies 

Most recently, environmental groups have raised concerns with the Public Utilities Commission of Ohio (PUCO) — the state’s chief energy industry regulator — that FirstEnergy Solutions’ proposal in bankruptcy court could result in consumers paying more to keep the coal plants running.

“In response to FES’s (First Energy’s) effort to reject the (power plant agreement), OVEC has stated that the costs for remaining OVEC owners, like DP&L’s customers under the Reconciliation Rider, could increase by hundreds of millions of dollars,” the groups said in an April 26 filing with the PUCO.

Those groups include the Sierra Club and the Ohio Environmental Council.

A DP&L spokeswoman said the company is reviewing the filings.

Asked if the First Energy bankruptcy could ultimately mean higher Dayton-area electric bills, the spokeswoman said that would be “speculation.”

“The First Energy Solutions bankruptcy process does not affect the operations of the OVEC plants.  The ultimate outcome of the ... bankruptcy process and the potential impact it may have on the partners and their customers -- if any -- won't be known for some time,” the company said in a statement emailed to the Dayton Daily News.

The PUCO approved DP&L’s electric security plan, setting rates and service obligations, last October. The plan lasts through Oct. 31, 2023.

DP&L serves about 515,000 customers across 24 counties, including Champaign and Western Clark County.

About the Author