There’s solar trouble in Ohio. For the second year of a two-year-old Renewable Portfolio Standard, Ohio utilities are requesting waivers from their solar electricity requirement. First Energy Corp – which is parent company to Toledo Edison, Ohio Edison and Cleveland Electric Illuminating – reports that they were unable to find enough solar renewable energy credits in Ohio needed to satisfy their 2010 benchmark for solar energy. First Energy has filed for force majeure for the second year in a row claiming that it was a circumstance beyond their control, a legal ‘act of God’, that prevented the company from buying the needed SRECs.
We didn’t believe it was an Act of God last year when First Energy filed for force majeure. Not when the company sought only current year vintage SRECs, knowing well from their experience as a corporation in Pennsylvania that solar projects require the securitization of a long term contract (>10 years) to develop new projects. We filed comments last year explaining that solar projects need the secure revenue stream of long-term contracts in order to make developer investment worthwhile. So when First Energy filed the same sorry excuses again, we could only think it’s awfully suspect that an Act of God would occur twice in a row.
In addition to the long-term contract issue on the wholesale side, First Energy has made a couple other moves that don’t exactly indicate a good faith effort to achieving its solar requirement. For example, the utility was required to start a customer SREC purchase program under the RPS this year. The program they made available to their customers offered a 15 year contract but with a floating price to be re-determined each and every year. Who would enter into a contract to sell a product at an unknown price for this year and the next 14? Only eight solar system owners that’s who.
And finally, First Energy could have followed the example of AEP Ohio, a neighboring utility that has successfully entered into a long term PPA with a 10 MW solar farm and is in development for another 49 MW solar facility as we write. If AEP can do it, so can First Energy.
So in our book, force majeure simply doesn’t fly. It’s more likely that First Energy is unwilling to meet its solar set aside and is not taking the state’s renewable energy standard seriously.
Last year the Public Utilties Commission of Ohio granted solar waivers and let the utilities off the hook. This year, we hope that the PUCO will either order First Energy to issue RFPs for long term contracts or pay the solar penalty ($400/MWh) for failing to meet their benchmark.
Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.