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To: no1coalking who wrote (1480)	11/1/2007 2:23:15 PM
From: no1coalking	Read Replies (1) \| Respond to of 2774

WHY FIRST ENERGY & OHIO NEED K-FUEL: FirstEnergy hires prominent lobbyist for regulation fight Posted by rroguski October 31, 2007 15:35PM Ted Olson FirstEnergy Corp. has retained former U.S. solicitor general Ted Olson as its constitutional expert to head off Gov. Ted Strickland's administration from regulating electric rates. Energy bill zips through Senate Though Gov. Ted Strickland has not proposed directly re-regulating the industry, his pending electric reform bill would have a similar effect -- and it would reduce FirstEnergy's potential future earnings by controlling retail rates. The Akron-based utility argues that the effect of the bill -- allowing the state to set retail rates -- would be unconstitutional and is preparing to take the state to court if necessary. The background FirstEnergy last year moved legal ownership of its power plants to FirstEnergy Solutions, a wholly-owned subsidiary that is not regulated. Solutions sells the power to the traditional utilities, the Illuminating Co., Ohio Edison and Toledo Edison. The ownership move -- allowed under the state's deregulation law enacted in 1999 -- means the state cannot regulate the price of the electricity that the power plants produce because Solutions is unregulated. That 1999 law, which Strickland is trying to replace, would allow Ohio utilities in 2009 to automatically base retail electric rates on regional wholesale markets. (The thinking a nearly a decade ago, when the deregulation law was enacted, was that unregulated power producers would have flocked to the state within five years, driving down rates.) FirstEnergy has proposed setting its 2009 rates using a series of auctions in which FirstEnergy Solutions would compete with independent, merchant power producers. The auction plan is pending before the Public Utilities Commission of Ohio. FirstEnergy is simultaneously fighting Strickland's proposal, first in the Ohio Senate, which is expected to vote out the bill today pretty much as Strickland proposed, and in the coming months in the Ohio House, which has announced it intends to have hearings into late January. Olson has registered as an Ohio lobbyist for FirstEnergy, spokesman Ralph DiNicola said. "We retained him to help answer any constitutional questions that Ohio lawmakers may have," he said. "We wanted to make sure we had a well respected source of information for the Legislature to respond to any questions they might have . . . because our power plants are in somewhat of a different situation." The company's lawyers have already presented their legal arguments to the administration and to PUCO lawyers in private discussions, which they initiated immediately after Strickland unveiled the outlines of his plan in a major address just before Labor Day. State lawyers don't agree with the company's position. The bill does not allow FirstEnergy to head to market unless the PUCO determines that there is a truly competitive market that would lead to lower retail rates. FirstEnergy CEO Anthony Alexander has made it clear in interviews that the company would resist such an outcome. DiNicola amplified that position. "We feel very confident in our position. And we believe that it is a path the state just doesn't need to go down," he said. "But if the state does go down it, we are very much prepared to defend our rights in court." As for Olson's role as a lobbyist, DiNicola said, "We thought that if we answered all of the constitutional questions up front we would end up with a law that would not be needlessly delayed in court. It just doesn't make any sense to go down that path if we can answer the questions up front." Olson, considered a leading constitutional lawyer, was an assistant attorney general for the Reagan administration, represented President George Bush before the U.S. Supreme Court in the case that ultimately determined Bush's 2000 victory over Democrat Al Gore and was solicitor general from 2001 to 2004, during Bush's first term. ------------------------------------------------------------ *Ohio BILL. Energy bill zips through Senate without opposition Posted by Aaron Marshall October 31, 2007 18:24PM Categories: Breaking News, Electric Columbus -- A comprehensive energy regulation plan plugged by Gov. Ted Strickland zapped through the Ohio Senate floor Wednesday without the shock of a "no" vote. Strickland's Energy, Jobs and Progress proposal is contained in Senate Bill 221, which cleared the Senate 32-0 and is now headed to the Ohio House Public Utilities Committee for a series of hearings that are expected to stretch into 2008. The far-reaching plan would set electric rates beginning in 2009 at Feb. 1, 2008 levels under so-called "electric security plans" and would block utilities from raising electric rates to match regional wholesale prices. Utilities could only head to the free market if they could prove that a robust competitive wholesale market for electricity existed in the region. Lawmakers are worried that if they allow utility companies to sell their power on the open market that prices for electricity will spike sharply as was the case in several other states that chose that path recently. In a news release, Strickland hailed the legislation's passage as a major step to "ensuring stable and predictable" electricity rates. "Put simply: the Ohio Senate took my energy proposal and made it even better," said the Democratic governor. Action now shifts to the Ohio House, where Ohio's large investor-owned utilities aren't happy that their path to a free market is blocked by language they see as vague. Their army of well-heeled lobbyists will push for more specific criteria to be laid out by lawmakers. "It's got to be more than the PUCO (Public Utilities Commission of Ohio) saying we know it when we see it and that is what the current bill is," said Mark Weaver, a spokesman for the Ohio Electric Utility Institute. "It is important that there be a definition that everyone agrees on that can't be changed in the regulation process." Also pushing for an easier path to the free market for utilities is Ohio Consumers' Council Janine Migden-Ostrander. "The market option in the First Energy territory has the potential to save customers far more money than an electric security plan," she said. "Why not just line up the two and choose the least cost?" Also certain to be heavily debated in the House: A provision in the bill requiring that by 2025 Ohio utilities get 25 percent of the power they sell from "advanced energy" such as clean-coal power plants, as well as from renewable sources like solar and wind. While Strickland's plan emerged mostly intact, state senators added a requirement that state regulators hold open hearings when utilities want to negotiate rate increases. "It's time to get the public utilities to be more public than private," said Sen. Teresa Fedor, a Toledo Democrat who heads the Senate Democratic caucus.