Ohio Energy Report: August 2023

Disbursement of Settlement Checks for HB 6 Class Action Lawsuit Underway

On July 7, 2023, the United States District Court for the Southern District of Ohio (“the Court”) entered an Order approving the $49 million settlement reached in Smith v. FirstEnergy Corp., et al., Case No. 2:20-cv-3755. The Complaint in this class action case alleged a racketeering scheme related to House Bill 6.

On July 31, 2023, the Settlement Administrator, Ohio Electricity Litigation, began distributing settlement checks to FirstEnergy (FE) Ohio customers from the class action. If you were a FE customer of the Illuminating Company (CEI), Toledo Edison (TE), or Ohio Edison (OE) between January 1, 2020 and June 22, 2022 and did not actively opt out of the Settlement Class, then you are a class member and should expect to receive your settlement payment during the month of August 2023. Class members include residential, commercial, and industrial customers.

Pursuant to the Order, class members awarded payments of $250 or less will receive digital payments from the admittedly silly sounding “[email protected].” Class members that do not have a valid email address can expect to receive physical Mastercard gift cards sent by US Mail. Recipients of payments greater than $250 will receive a check from Ohio Electricity Litigation by US Mail.

Crain’s Cleveland Business recently interviewed Matt Brakey, President of Brakey Energy, in a story about the settlement. “A lot of these checks were hitting mailboxes last week,” Matt said. “I’ve gotten calls from clients asking if it’s for real, thinking it’s too good to be true.”

If you believe you are an eligible member of the settlement class and have not received a digital payment by email or snail-mail by the end of August, then you should email the Settlement Administrator at [email protected] or contact the toll‐free telephone at 1‐877‐888‐9895.

PUCO Approves AES Ohio ESP IV’s Application with Stipulation and Recommendation

On August 9, 2023, the Public Utilities Commission of Ohio (PUCO) issued an Opinion and Order in Case No. 22-0900-EL-SSO approving the Stipulation and Recommendation filed on April 10, 2023 by various parties in AES Ohio’s Fourth Electric Security Plan (ESP IV) application. Once initiated, AES Ohio’s ESP IV will be in place for three years. During that term, AES Ohio residential customers and non-residential customers served below Primary voltage can expect to see modest increases in their distribution charges. AES Ohio customers served at Primary and above are expected to see decreases in their distribution charges.

One of the most significant changes that will be brought about through AES Ohio’s ESP IV relates to billing for transmission charges. Beginning in June 2025, AES Ohio will bill all non-residential customers taking service at or above primary voltage, and any non-residential secondary customers that opt-in, Transmission Cost Recovery Rider (TCRR) demand charges on the basis of their Network Service Peak Load (NSPL). A customer’s NSPL is established for a calendar year based on how a customer consumes power during the single hour out of the preceding November 1 – October 31 period when demand on AES Ohio’s transmission grid, the DAY Zone, is the highest. This hour is known as the DAY Zone’s one Coincident Peak (CP).

If you are an AES Ohio customer and you have questions about how you may be impacted by AES Ohio’s ESP IV, please contact Katie Emling.

Peak Loads for Summer 2023

Brakey Energy provides email and text alerts in advance of potential Capacity and Transmission CPs to those clients that elect to receive them. As of August 16, 2023, Brakey Energy has issued five Capacity CP alerts and five FE Transmission CP alerts. We have not issued any AEP Ohio CP alerts during Summer 2023.

To date, only the top two hourly loads for the PJM Regional Transmission Organization (RTO) have registered within our predictive CP range. No ATSI Zone loads have registered within our predictive range. This is largely because of the very mild summer we have experienced.

So far this summer, Cleveland has only registered one day in which the recorded temperature was equal to or greater than 90° F. Compare this to a total of 7 and 13 days in 2021 and 2022, respectively. The last time there was only a single day that registered at or above 90° F in Cleveland was 2004.

The tables below list PJM’s and FE’s five highest 2023 summer loads and AEP’s single highest load since November 1, 2022, as well as the day and time of each occurrence. This is based on preliminary data.

Table 1: Five Highest Summer Loads for PJM through August 17, 2023

Table 2: Five Highest Summer Loads for FE through August 17, 2023

Table 3: Single Highest Load for AEP through August 17, 2023

The lowest historical peak load on record for the PJM RTO is 138,197 Megawatts. That load set the fifth CP in the summer of 2014. The lowest historical peak load on record for the ATSI Zone is 11,834 MW. That load set the fifth CP in the summer of 2017. One can see how low load has been registering this summer in comparison.

Brakey Energy will continue to monitor weather and load forecasts and will issue alerts to participating clients when warranted. If you are a Brakey Energy client that has not signed up for these alerts but would like to, please email Catherine Nickoson.

Electric Costs Decreasing on September 1 for FE SSO Customers

Electric costs will be decreasing on September 1 for FE customers that take electric generation service under the utilities’ Standard Service Offer (SSO). The SSO is the default rate charged by the utility for generation services to customers that do not contract with an alternative supplier. The SSO generation rate is higher during the three summer months of June, July, and August than it is during the other nine months of the year.

The current and September 1, 2022 SSO rates per kWh for customers served under OE, CEI, and TE Residential (RS), Secondary (GS), Primary (GP), Subtransmission (GSU), and Transmission (GT) rate schedules are shown in the tables below. These rates will change again on October 1.

Table 4: OE SSO Rates

Table 5: CEI SSO Rates

Table 6: TE SSO Rates

If you are not receiving electric generation service from an alternative supplier and would like more information about how FE’s SSO rate update will impact your monthly electric costs, please contact Katie Emling.

Residential Corner

The offer we described in last month’s newsletter as “a shockingly low 4.3¢/kWh 100% renewable 12-month agreement” has been pulled. The best offer we are currently seeing is from Better Buy Energy for 15 months at a rate of 5.69¢/kWh. While significantly higher than last month’s highlighted offering, it is still a compelling value that beats just about everything else available

Regarding natural gas, if you entered into a fixed-price residential natural gas contract that does not include an early termination fee, including the residential offers Brakey Energy highlighted prior to this past winter, you should seek to exit and either enter into a new agreement or default to the Standard Choice Offer (SCO).

Brakey Energy has long and often found defaulting to distribution utilities’ SCO a prudent strategy for natural gas supply. We encourage our readers to utilize this strategy if they are comfortable riding the highly volatile natural gas market – especially through the fall. To employ this strategy, you simply need to provide termination notice to your existing supplier and you will automatically be defaulted to the SCO.

Carolyn’s Campaign

Last month, we first highlighted Carolyn Brakey’s bid for Geauga County Commissioner. Since then, Carolyn held a highly successful fundraiser at Bainbridge Township’s Wembley Club. Carolyn was touched by the incredible support she received from many Brakey Energy clients and colleagues. Feel free to email Carolyn if you are interested in connecting with her about the campaign. Also, be sure to look for Carolyn at the Geauga GOP tent at the upcoming Great Geauga County Fair from August 31 through September 4.

Natural Gas Market Update

The NYMEX price for August settled at $2.492 per Million British Thermal Units (MMBtu) on July 27, 2023. This price is down 4.3% from July’s price of $2.603 per MMBtu. This settlement price is used to calculate August gas supply costs for customers that contract for a NYMEX-based index gas product.

The graph below shows the year-over-year monthly NYMEX settlement prices for 2019, 2020, 2021, 2022, and 2023 to-date. Prices shown are in dollars per MMBtu of natural gas.

Figure 1: NYMEX Monthly Natural Gas Settlement Prices

Figure 2 below shows the historical August 18, 2021 through August 18, 2023 Around the Clock (ATC) forward NYMEX natural gas prices in dollars per MMBtu for the balance of 2023 (labeled “Custom Strip” in the graph below) and calendar years 2024, 2025, 2026, 2027, and 2028. Natural gas prices for the balance of 2023 and calendar year 2024 continue to trade at lower levels compared to outlier years.

However, with only four trading months left in the year, there has been a recent increase in prices for the balance of 2023. Prices for outlier years are hovering right around $4.00 per MMBtu.

Figure 2: ATC Calendar Year NYMEX Natural Gas Prices

*Pricing courtesy of Direct Energy Business.

Electricity Market Update

Figure 3 below shows the historical August 18, 2021 through August 18, 2023 ATC forward power prices in dollars per Megawatt hour (MWh) for the balance of 2023 (labeled “Custom Strip” in the graph below) and calendar years 2024, 2025, 2026, 2027, and 2028 for the AD Hub. Like gas, the power market finds itself in a state of contango. Forward prices for calendar years 2025 through 2028 are hovering right around $45.00 per MWh and prices for the balance of 2023 and calendar year 2024 are trading south of that level.

Figure 3: ATC Calendar Year Power Prices for the AD Hub