EON on Generation and Transmission Opportunities

EnergyOhio Network

FirstEnergy’s plans to spend approximately $3.5 billion on transmission upgrades in Northern Ohio consist of:
• $2.5 billion of upgrades to its 69 KV “sub-transmission” system, the part of the system that transfers power form the long-distance 138 and 345 KV systems, on the big towers, to the local 13.8 KV and below pole lines. This includes substantial upgrades to equipment within existing substations.
• $700 million of new 138 KV and 345 KV transmission lines and related substation extensions.

FirstEnergy’s American Transmission subsidiary will own these facilities. American Transmission is a PUCO-regulated, guaranteed rate-of-return entity.

FirstEnergy states that the $700 million of transmission work is required to replace its northern Ohio power plants that it shut down to avoid upgrading them to comply with the Clean Air Act.

FirstEnergy sold its 700 MW Fremont combined cycle plant to AMP, who uses it to supply power to its members in Michigan, Ohio, Delaware and Virginia. FirstEnergy announced a plan to add 873 MW as four peaking gas turbines at its Eastlake site, where 1257 MW of coal and gas capacity are being closed down, jointly with AMP. This project was cancelled, allegedly due to the US sequestration budget impact. FirstEnergy had previously studied the construction of a 600 MW combined cycle plant in the Lorain – Avon Lake area, to take advantage of the high-pressure gas transmission lines in the area, but did not move ahead.

FirstEnergy has recently announced the sale of 11 hydro power plants, the largest of which is the 450 MW Warren PA pumped storage unit.

Given the financial impact on many northern Ohio cities of the closure of FE’s coal-fired units, and now the need to pay for these $3.5 billion of transmission upgrades, EON suggests that PUCO should require that access to the former coal-fired sites be provided to developers of alternative power generation facilities, given that Ohio rate payers have paid for the entire capital and operating costs of these plants. PUCO could arrange for developers to submit proposals to convert the sites and to transmit the power using American Transmission’s existing system under its Open Access Tariff, bidding into the PJM market, or by bi-lateral agreements with power purchasers.
EON 11.12.13 Network

Andrew Grant

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