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Ohio To Look at Emissions Trading in Fuel Clause Cases

Fortnightly Magazine - March 15 1997

The Ohio Pubic Utilities Commission has approved a series of amendments to its rules on fuel cost adjustments for electric utilities, implementing previously approved guidelines for the ratemaking treatment of emission allowance transaction activities.

In the earlier ruling, the commission had found that its Electric Fuel Component rate mechanism provides the most appropriate forum for review of emission allowance plans, transactions and recovery of associated costs.

In clarifying its existing regulations, the commission acknowledged that emission allowances have become a standard cost of doing business in the power market. It made clear that allowance costs associated with both power purchases and sales are to be treated as fuel costs for ratemaking purposes. It also updated its rules for calculating the "jurisdictional split" of both federal allowance auction

proceeds and gains or losses from sales of ratepayer-funded allowances. Re Chapter 4901:1-11 of the Ohio Administrative Code, Case No. 94-1792-EL-ORD, Jan.16, 1997 (Ohio P.U.C.).

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