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Good afternoon and welcome to The City Club of Cleveland, where we are devoted to conversations of consequence that help democracy thrive.

It's Friday, October 23rd.

My name is Dan Moulthrop.

I'm the Chief Executive here at The City Club, and I'm also moderating our conversation today.

Thank you all so much for being with us.

So over the summer, many parts of our nation were hit with strong storms and persistently record-high temperatures.

Power grids found themselves stressed beyond their limits.

Outages lasted days at times.

The combination of aging infrastructure and increased demand has led to a perfect storm, as it were, all during a time when many households are struggling to afford the basics.

As you all know, your own personal energy bill and that for any business you might work at is up a lot.

According to analysis by Signal Ohio, electric bills are up an average of 12% over last year, and 62% over the last 10 years.

Add to this the arrival of data centers, a desire to increase manufacturing across the state of Ohio, all of which has shifted the energy landscape and created some new, sometimes contentious questions about the future, about affordability, and about capacity on a grid that is already somewhat stretched and stressed.

So our questions today regarding energy: what does the future look like in Ohio?

Who should pay for it?

And if we predict wrong, also, who should pay for that?

Joining us on stage to discuss these and other questions, Ryan Augsburger.

He's President of The Ohio Manufacturers' Association.

Alexandra Denney is Senior Vice President of External Relations at The Ohio Business Roundtable, which represents the largest companies in Ohio and is focused on economic growth.

And Abigail Phillips is Vice President and Chief Risk Officer of FirstEnergy Corp.

Thank you all so much for being with us today.

Before we begin though, a quick reminder for our livestream and radio audience.

If you have a question during the Q&A portion of the program, you can text it to 330-541-5794 and our staff will work it into the program.

That number again is 330-541-5794.

So let's start with why.

Why is the cost of energy that customers are paying up 62% more than it was 10 years ago?

Abigail,you start.

So in, in my role, I look at all risks and opportunities that impact our industry, our company, and our customers.

And I think the most simple way to put it is it's a confluence of a lot of different factors, from weather to aging infrastructure to demand growth that we haven't seen in the last 20 years.

And when you have that stable demand growth, you don't have the, the increases at all.

And also, you know, weather, as you pointed out, has been battering not only Ohio, but, you know, the entire country in various ways.

So when you have that confluence of a lot of those different factors, then that, that, that has an impact on the overall bill.

That said, you know, what we're doing, and part of my role is to understand how to address all of them, not in a silo, but all, but all together, so we can create that safe, reliable, and affordable energy for our customers.

So we're looking at all these things in concert with one another and trying to come up with the optimal solutions that is best for, for all of our customers while, you know, like wanting to have the economic growth that we see as the opportunity side of this.

Alexandra Denney, from a perspective of the Business Roundtable, do we have enough electricity in Ohio today?

No.

Say more.

Um, I think that Abigail's points were spot on in terms of this confluence.

We are seeing a large increase in demand following decades of stagnant demand, and that's definitely strained the system.

But also, you know, those things that Abigail said, in addition, we are retiring old infrastructure at a time of this demand that is really straining it even further.

So, you know, we are supportive of all of the above in terms of resources that are supporting the grid, and we also support moving toward a carbon-free world, but right now that can't be achieved, and we can't roll— we can't retire coal from the system when we're experiencing this.

So all that to say that the retirements right now are also adding to the confluence of the— We're taking energy offline when we need more.

Yes.

And that's a challenge.

That's putting an upward pressure on the price.

Correct.

Ryan Augsburger, how do you see this, the price challenge and the future challenge?

Yeah, well, first of all, thank you, Dan, and to the City Club for tackling this topic today.

It's important to my membership of manufacturing companies all across Ohio.

3rd largest manufacturing state in America.

This is the manufacturing heartland of America here in the Great Lakes Midwest region.

Nowhere knows that better than Cleveland.

So, a really important conversation.

We can't compete as a manufacturing state if we don't have affordable and reliable power.

I think that's one thing all of us can agree on today.

But then you get into the details and, and, and the premise of the question that you asked, Dan, What's causing the affordability problem, and it is a problem right now.

Manufacturers are having to pay power bills that they didn't budget for last year.

Households are seeing the same type of thing.

So we're approaching this solely as a customer, and our contention is that the forecasting that is driving the price of your power bill primarily through 2 of the inputs, the input called transmission and capacity, part of the generation piece, that those 2 pieces have gone sky high, not just in the last few years— that's the generation piece— but for the past 10 years, customers have been having to pay sky-high transmission charges for infrastructure that we don't really know very much about.

What I mean by that is we don't really know if we're getting anything for it.

So we want to make sure that Markets succeed.

If we need more power, my organization, Free Market People, believes a competitive market will respond to that new generation.

Always has.

So, we gotta make sure that that market structure works.

The question about, do we have enough power in Ohio?

Our contention would be that it's not exactly— the question is, do we have enough power in the grid that we're part of?

We're part of the PJM region.

That's the name of the company.

Interconnect, and the reality is we have over 15% reserve capacity right now.

So a lot of problems.

I'm sure we're gonna be getting into PJM a little bit more, but we believe that market economics will solve a problem if and when we need new power generation.

Okay, you've brought up a lot of, a lot of things.

I really want to highlight the fact that the, the source of disagreement or the contention on the stage right now is around predicting and forecasting how much energy we are going to need, not tomorrow, but more like 5 years from now, 10 years from now, and then whether— how we prepare to meet that need.

But I do want to take a step back before we get to that and ask Abigail Phillips, can you explain to, to me as if I'm a 6th grader or a Labrador exactly what PJM that Ryan referred to is how it operates, and why Ohio doesn't really exist in its own little ecosystem.

It's in fact connected to a much broader grid.

Sure, so I'm gonna break it down into the 3 main components of energy.

There's your generation, which is the, that makes the electrons.

There's the transmission, which when you look out and you see towers, they kinda look like this.

They, that is the, those are the wires that transport those electrons from the generating plants to the demand centers, essentially, where people need to use the electrons.

And then there's the distribution system, and that is the system that takes kind of that, those high-speed electrons, and kind of puts it into, you know, electrons that you can use in your house, so your hair dryer doesn't, you know, explode when you try to turn it on.

So, with those 3 components, In the state of Ohio, because we're deregulated, the market— we're a deregulated market— the PJM, which is the regional transmission operator, has jurisdiction over the transmission piece of this, which is like the interstate, which helps to say, you know, where do the electrons need to go based on the demand?

They have jurisdiction over the market, which helps say, how much generation do we need?

And that doesn't say where it goes, but just says it sets the price for what is that generation going to cost.

But they don't have any influence over the distribution, which is the wires that go into your household or into some of the small organizations.

And so when we talk about this in terms of what the state of Ohio has control over, what doesn't have control over, you know, PJM is responsible for making sure that everything in the system is balanced.

And one of the things that I learned at the very beginning of understanding this regional transmission operator is that they make sure that all the generators in the region, going from Ohio over to New Jersey, down to Virginia, are balanced, and they're all, they call it, they're spinning at the same rate, so you have grid stability.

So they're responsible for grid stability with transmission generators.

They're responsible for reliability, in terms of making sure that we have enough and it's where it needs to be.

And so with that, you know, on top of those 3 components, you know, Ohio participates but does not have direct control of do we have enough where it needs to be at the right time?

That's what our regional transmission operator does.

Hopefully that was helpful.

Yeah, yeah.

I mean, yeah, let's call it helpful.

Yes.

Okay, let's call it helpful.

But so, So this morning, there were about 90 gigawatts that were being managed by PJM.

I looked this up this morning.

And PJM has projected growth of 5% year over year for this region that we're a part of, which extends from the Midwest to the Mid-Atlantic.

And there's about 60 or 70 million individual people living there.

That means that 5% year over year over the next 10 years would mean that in 5 years we would need 115 gigawatts, and in 10 years we would need, if it's 5% compounded, then we're gonna be up closer to 150 gigawatts, which is like 25 new nuclear power plants worth of electricity.

Good analogy.

Which seems like there's just no way that that's possible to build in 10 years.

Am I wrong?

I think the challenge is, you put the challenge really very starkly.

I think that there's other options.

So we definitely, I'll just put it out, we definitely need dispatchable generation on the grid because like Alexandra was saying, they're taking generation off.

So we definitely need that new dispatchable generation, but we also need everything else.

We need all the help we can get and we need probably programs that can manage the load, because the load, which is the demand, because some parts of the region will use more at certain times depending on where it is, and some will use less.

So what PJM does, and this is why forecasts are so important, is it needs to understand what that looks like so it can help plan to say, you're gonna need this here, You know, their demand is growing here.

We can't build generation in a certain period of time, so we're gonna have to pull it from other regions or other states, and that's where that transmission piece comes in, to move the electrons from point A to point B across state lines.

So they're constantly trying to find the right mix to say, here's what we have that we can plan for now.

Here's what we'll need in the future.

Here's what we'll need to build.

You know, right now, they're going through something that they realize that they're creating— they're evolving right now, as well, to say, This hasn't worked in the past.

We know that we might have a gap.

Let's kind of evolve and create new paradigms for ourselves so we can get the right generation, so we can get the right transmission.

So they're constantly reinventing themselves and trying to plan because they see kind of this challenge that you bring on with the challenges.

Can we get all the, all that generation built?

Well, we may have to pull some other levers from demand response, building more transmission, kind of doing all the things that we need to do to make sure that we have the reliability that we need.

When I assume the Ohio Business Roundtable is like part of these conversations about forecasting, and you're saying, yeah, we're gonna, we're gonna need more energy.

You've already said we need more energy, we don't have enough.

How do you know how much more you're going to need?

And what I really mean by that is, when does the idea of a deal of a new company coming to Ohio become actually something you can bank on and say to FirstEnergy or say to PJM, we are actually— we— this needs to be built.

Yeah, so, um, I'll use AEP as an example and Central Ohio.

Apologies for taking us out of Cleveland, but let's, let's use Central Ohio because they are experiencing the most growth right now in terms of, um, the AEP load.

So AEP in Central Ohio, um, as of 2025 the whole Central Ohio load was 4.4 gigawatts.

The company's been around for 100 or so years.

It's taken that long to build 4.4 gigawatts.

They have signed contracts, and this signed contracts is the true answer to your question, Dan.

They have signed contracts to add 5 gigawatts, so more than doubling the grid by 2029.

And those signed contracts are predominantly what PJM bases their load forecast off of.

There is also something called a speculative queue, and that happens, you know, when businesses are thinking, oh, maybe I'm interested in Columbus, maybe I'm also interested in Cleveland, and they will put an inquiry in the speculative queue for a utility.

AEP's speculative queue last year was 32 gigawatts.

Are there projects that won't come to fruition in that?

Yes.

You hope so, actually.

You hope so.

Are there projects that might have, you know, put an inquiry into AEP's queue and FirstEnergy's queue?

Yes.

But those are not signed contracts.

AEP did stop their queue so it didn't grow anymore and said, look, we need reforms because we really need to understand what's real and what's not.

And the reason that they had that, you know, exponential growth in their speculative queue was because of the increased demand of data centers.

They do use a lot of power.

We gotta call a spade a spade in that conversation.

But we need to make sure that they are being real about how much they actually need.

So the state of Ohio was a leader in implementing a data center tariff, essentially creating a new class for the data centers that they have to pay 85% of the infrastructure upgrades if they sign a contract with AEP.

And if they end up not coming to fruition as a project, they are still on the hook for paying those upgrades.

So we have kind of made them open their checkbook to prove that they are a real, real project and really do need those infrastructure upgrades.

And it has worked.

Do they pay that 85% upfront?

Yes.

So it has worked because AEP has now right-sized their speculative queue.

It has more than halved halved that queue amount.

Can we continue to have conversations about how to further, you know, pressure test and create policies to make sure we are getting that speculative queue right?

Yes, absolutely.

And that can be done at the state.

Definitely need some, some PJM reforms as well.

But really, to get back to your, to your question, Dan, is there are signed contracts, and that's what the forecasts are predominantly based off of.

So that's the Ohio Business Roundtable perspective.

Ryan Augsburger with the Manufacturers Association, you've, you've pointed directly to this problem with forecasting and forecasting accountability.

What's the problem with relying on signed contracts?

Well, thank you.

That— this is a— this is exactly the core.

This is the source of the problem.

The forecasts are overstating prospective speculative future load need.

And what happens is when that goes through the process, it creates an appearance of scarcity in the market that drives up the generation component, and it creates a larger target for the utility to build out infrastructure.

So this is how the generation component and the transmission component 2 of those 3 components have been going up, and it's because of the forecast and what's happening.

We— I'm sorry for Abigail that we've predominantly, uh, looked and studied at the AEP utility because these are done— forecasts are produced based on the transmission utility level.

So the monopoly that owns the transmission wires, we, we've, we've read the AEP forecast quite carefully, and we find that they count the same speculative future, maybe data center more than, more than one time, more than 2 times, more than 3 times, more than that.

So if you take a 200-megawatt, for example, that's a, that's a pretty good-sized factory.

That's a pretty good-sized data center.

But if you count it 5 times, you're all of a sudden counting and forecasting that you need 1,000 megawatts.

Well, that's one of the big problems with forecasting practices that we're seeing right now.

So I'm sorry, it sounds like you're alleging fraud.

Not prepared to say that, but we do think that the forecast is causing power prices to go up.

You don't believe me?

Look at your power bill.

You know, that's not sustainable.

We can't have a competitive economy if these bills are allowed to go up unchecked, and the forecasting has opened the door for customer overcharging.

I represent customers exclusively, and that's why we need to see improvements in the forecast system.

There are other deficiencies in the forecast.

Let me, let me, let me just take this, take one piece of this.

Is the forecasting creating upward pressure, forecasting for years from now, creating upward pressure on prices today?

Abigail Phillips at FirstEnergy.

So we have to build for what's going to inevitably happen.

So the, the short answer is yes, but I would just like to point to the rigor in the forecasting and how when you think of the forecast, our entities have an obligation to serve all customers.

So when a customer comes to us and says, I'm really interested in hooking up in this particular area, you know, there is a very rigorous process.

There are 4 steps before we even get to contracting, what Alexandra was saying.

And so we go through an application process where we look at customers' financials, There's conceptual study, there's a high-level study, and then there's a more detailed study.

So when we do that, we have to understand what a customer wants because we have this obligation to serve that customer.

We can't say, no, customer, you go away.

And so in terms of what we have to go through to validate what needs to be done and then say, is this load going to happen?

Yes or no, you know, we get to our contracting gate and say, this customer has spent hundreds of thousands of dollars, acquired land, building permits, all these things, and say, okay, this is under contract, given us financial assurances.

Okay, this customer is real.

Because we have other customers in the steps before that, again, which is potentially more speculative, and they're trying to figure out what's best for their business, as they should.

But, you know, we kind of put that off to the side because ultimately the utilities have to submit from a, you know, forecast standpoint.

We submit to PJM what the forecast is.

So we have to decide what's real, not real.

We have to organize our entire workforce around, can we get this infrastructure built?

What do we have to do for this customer because of our obligation to serve?

We have to understand our customers.

So So when we submit those forecasts, we are confident that we— our obligation to serve this customer is going to happen.

Let's stipulate that you're confident, you're as confident as you can possibly be, and you wouldn't be investing all of that if you didn't believe it was gonna happen.

But there's always the possibility that a manufacturer comes to you and says, hey, we're gonna do this.

They make the investment, they're on their way, and then market conditions change.

Say tariffs come into play and they can no longer afford to do what they plan to do and they shut the project down.

Who should pay for the infrastructure that's been built at that point?

Well, so back to what Alexandra was saying, you know, part of what we do, what we put into these large, especially the larger load contracts, they have to pay for those upgrades.

So we are not putting those costs on any of the other customers.

They have to pay for what they, for what they want to build.

I think probably in terms— so that's on the transmission side, and we get assurances on that side.

I think that the challenge, and I think that what I said, PJM is evolving and trying to think about this, is from a generation, who's going to pay for the generation?

How is that going to be built?

And so now, in terms of where we're going, the capacity piece of it is, do we have enough capacity?

All right, we need to factor that into the equation too, and you have to pay for your own capacity, because you can't— we can't be increasing this load forecast of not having the capacity without you offering those solutions to come along with that.

And I guess an important example of that, uh, and Alexandra Denney, maybe you can speak to this, would be the Meta— the deal that Meta did with Vistra to, to basically fire up the, the currently dormant tower at the nuclear power plant in Northeast Ohio, Northwest Ohio.

I can't remember which one it was, but Uh, yeah, so, um, 2 great Ohio Business Roundtable members.

Dan, thanks for bringing up— but yes, we, we need those continued type of investments.

I think what's notable about that arrangement is, you know, when it gets announced and, and it can be hard to understand the energy jargon, but those uprates that are coming are going onto the grid.

Meta is not paying for that and taking for it themselves.

Taking it for themselves.

They're paying for those uprates that are gonna benefit the entire grid, residential customers, commercial, industrial customers.

We need to be able to keep assets like Perry and Davis-Besse online.

Again, especially that is carbon-free dispatchable energy baseload power, so we need more of that.

We can't let them, you know, come close to their retirement date without making those upgrades to extend the life lifecycle of them.

Ryan Augsburger, you said before that cost and reliability are the 2 most— the 2 highest priorities for manufacturers that you represent, right?

Yeah.

How important is— another piece of this is kind of economic growth, right?

Preparing a platform for viable economic growth.

How important is that to the Ohio Manufacturers' Association?

Right.

Well, we have— we support a growing economy.

And we have a growing economy.

We have a growing manufacturing sector.

We have other sectors of the economy that are growing, notably data centers in this related conversation.

But the, the— again, it has to be a balance.

We have reliable power for the most part, but it's got to be done affordably.

Forecasts follow money.

So, you know, I Our organization works around Capitol Square in Columbus, right, trying to influence public policies, laws that the Ohio Senate, Ohio House of Representatives, the administrative agencies like the Public Utilities Commission make.

Those affect your power bill quite a bit.

At the same time, we've got competitive market.

We want the competitive market to succeed.

But the question around Cap Square, anytime there's a law or bill or a resolution that we're we're analyzing and advocating for or against.

It's follow the money.

Who's, who's winning?

Who's losing?

And so if you have high forecasts, the winners are the people that own the wires, transmission companies, because you're forecasting you need more infrastructure.

You got to build more infrastructure.

I'm going to interrupt you for a second, Ryan.

You brought this point up before, but let me ask you, like, as a— you represent business owners.

Right, who are forecasting growth all the time and making speculative investments based on where they believe the market is going to go.

How else should a FirstEnergy operate if not preparing for a theoretical future that in which they have a lot of confidence by making those infrastructure investments?

What else should they be doing?

Well, we can't expose customers to paying junk charges that customers aren't getting a benefit from.

This is a very simple concept.

Cost causers must pay the cost.

And the, the tariff that the state of Ohio is using right now, we believe, is poorly designed and will— this 85%— will affect and will gouge existing customers, not just business customers, but residential customers, small business customers.

It will not protect incumbent customers.

And yet there's widespread Bipartisan agreement.

President Trump, Governor Shapiro in Pennsylvania, other governors have written saying we need to make sure the cost causer pays their share in full.

But yet our state's not working off of that playbook.

In fact, we're doing the opposite right now.

So that's not positive economic development.

Ryan, I'm sorry, I'm confused because the— what, what I heard before was that the cost causer, as you refer to them, is would be paying 85%.

I did, I did want to ask who's paying the other 15%.

I assume that economic development agencies, and there's incentives, and, and that's a whole other ball of wax.

But what am I missing?

You've had several comments on this earlier.

We talked about the economic development rider on your bill that can be used to pay for infrastructure that gets stranded and other customers have to pay it.

If a plant does not materialize, you alluded to that, and that does happen, that's why we need a safeguard that ensures that the cost causer pays it upfront, not over time, because what happens if in 10 years that data center in this conversation goes away?

It's gonna get distributed on, socialized on all other existing customers.

That's why the current tariff structure is insufficient.

Abigail Phillips, you were at the start of what Ryan was saying, you were nodding, you're saying yes, the cost causer is paying.

Do you want to add some more context?

Well, and then we just collect credit and collateral from these customers, um, to, you know, to further say if they don't manifest and they don't show up, we have some repercussions if they don't.

I think what— I think one of the things that we have to think about is we can't, we can't plan for the exception.

We have to plan for what's real and what we're seeing.

And because if we don't The opposite could be worse because it could impact reliability.

It could impact all these things.

So what we do is we run our scenarios, we run, we stress test, we run our scenarios.

We say, you know, like, let's look at all these inputs.

This is the low probability of this happening.

This is the medium.

This is the high.

And we're looking at, you know, what are the range of possibilities?

And what we see is directionally, because the demand is increasing because of growth, because of technological innovation, we are growing, so that's great.

But we can't plan for the one or two exceptions where something may not happen.

We just have to plan to be able to pivot for that and collect those costs from those customers when that does happen.

And we have, you know, financial assurances in place to do that.

Um, Abigail, my next question for you is, um, perhaps not fair, but I think it has to be asked anyway.

Part of the, the skepticism that people have to towards FirstEnergy has to do with things that happened prior to you joining the FirstEnergy leadership team under HB 6 and the whole, you know, and the corruption that, that was, that came along with HB 6, which is currently, you know, being dealt with in federal courts.

What is different today in this post-HB 6 era that should give customers and your partners confidence that that they can believe what FirstEnergy is saying?

So, I'll touch on 2 main points and go into a little bit more detail on the first, but fundamentally, we're just a different company with a completely new executive leadership team.

So, you know, that is, you know, our leaders guide our outcomes, and the second is that we have a robust ethics and compliance program that did not exist before, and that ethics and compliance program is involved in political oversight across the, you know, what our executives do, what everyone— the engagement.

And so those 2 factors, you know, create a different paradigm for how we operate.

And going back to our executive leadership, myself, you know, being included, we come from a lot of different other utility companies in different parts of the country where there is an increased sense of rigor around data analytics, knowing, you know, what do we need to look at to make the best decisions.

And our executive team constantly is asking, what is the data telling us?

What are we doing?

How can we make the best decision?

How do we need to think about this differently?

And, and we challenge each other on things.

And so, you know, that is very different from the previous version of FirstEnergy, where I, I don't think the executive team challenged each other in that way.

Where is that?

There is that healthy challenge now at FirstEnergy.

Thank you.

Appreciate you being willing to answer that question candidly.

We're gonna be getting to the Q&A with the audience in, in just a minute, but I wanted to just bring to light something we discussed in the prior to this, that there's an announcement recently that Nestlé is moving part of its operations out of Northeast Ohio to South Carolina.

And Ryan, you said that one of the reasons cited was the cost of energy.

There was some skepticism that energy is all that much cheaper in South Carolina.

Alexandra Denney, from the Ohio Business Roundtable perspective, you look around, you, you're helping to create legislation and advocate for legislation here.

Is there a state that is doing this better than Ohio?

That's an excellent question, Dan.

We believe following the passage of House Bill 15 at the beginning of last year, which really helped address a lot of siting and permitting, and rate-making processes at the Public Utilities Commission, that Ohio certainly is a leader.

Every state is experiencing a tremendous amount of demand and increase in rates, and we should address that.

We should ensure that it's affordable across all sectors— industrial, commercial, residential— absolutely.

But these type of announcements like Nestlé, and I haven't looked into exactly, you know, the reasons cited or any of that, but That's exactly the reason that Ohio Business Roundtable started getting involved in the energy policy discussions, was because we want Ohio companies to stay in Ohio, and we want non-Ohio companies to discover Ohio, and discover what we all know to make economic development great in Ohio.

We wanna continue to win those projects, we wanna continue to retain them, so that is a problem, and we should, certainly should look into it, but it is exactly why energy policy and these type of conversations are so critical for the state.

Ryan Augsburger, same question to you.

Is there another state that you think is doing better when it comes to manufacturing customers?

There's a lot of differences across this country.

You know, markets and economic development, you know, spur— are spurred by innovation.

Innovation is critical to manufacturing and innovation is, is capable of solving a lot of problems.

If, when we need more power, innovation can help to get that in.

And so the power of markets to allow innovation to come through is exciting.

We should be looking at other states.

You know, this is complicated.

You've got states that are regulated and you have states that are deregulated.

That was 30 years ago that Ohio chose to deregulate.

Free market groups like mine supported that.

Uh, and then you have the different overlay of the different grids that operate it.

So again, we've mentioned PJM.

They're the largest grid operator in the country.

Uh, until recently, we've been generally defenders and supporters of PJM.

Right now, we're pretty concerned about their, their management.

My colleague from the Ohio Business Roundtable, Alex, thanks for bringing up House Bill 15.

We too supported that.

It did a lot of really innovative things to help, uh, the innovation economy, and one of them was behind-the-meter, made-behind-the-meter power generation.

So if you're a data center or a manufacturer, you can go buy a contract with a neighbor to build a generator of power for you on site.

Uh, and, and that's good.

Again, that's the market, that's innovation.

But back to my earlier point on, on the problem with forecasting, that's not getting taken out of.

So we got 5 megawatts in Ohio as a result of that bill that has come behind the meter.

We want to generate for one customer or one industrial park but that's not getting backed out of the forecast demand.

And again, that's what's driving up all of our power bills, and we're not going to see any relief until we get better accuracy in forecasting.

Abigail Phillips, you were shaking your head.

As it was, it was— was that backed out of the forecast?

Well, that's just not how the grid works.

So it can be in front of the meter or behind the meter.

If it's behind the meter and not connected to the grid at all, it would not be included in the forecast.

But if it's in front of the meter and they have cogeneration, it needs to be included in the forecast because they're still getting additional services from the grid, and the grid still has to plan for it.

So there's kind of 2 ways that you can look at co-located load in terms of in front of the meter or behind the meter.

And behind the meter, like, you think of it just as an island, and so that would not be included in the forecast.

But if it's in front of the meter and it needs the services from the grid, from stabilizing and kind of the balancing that I talked about, the whole grid, they need to be included in the forecast, because if all of a sudden their generation disappears, they still need the services from the grid to keep going.

And what I'll tell you is, like, from a customer perspective, you know, everyone's trying to be innovative.

I definitely agree to that.

But the reality is customers want that safety net from the grid in case anything were to happen with that generation, because if their own generation goes away, then they stop working.

Like, they can't produce the, you know, the, the widgets or whatever they need to produce.

So most of the time the customers say, no, I really want that safety net of the grid.

But in how we have to plan, there's no way if it's behind the meter, they're not included in what we present to our forecast.

But if it's in front of the meter, it has to be included.

Abigail Phillips is Vice President and Chief Risk Officer at FirstEnergy Corp.

Also with us on stage Alexandra Denney, Senior Vice President of External Relations at the Ohio Business Roundtable, and Ryan Augsburger, President of the Ohio Manufacturers' Association.

So we're gonna get started with the audience Q&A right now.

I'm Dan Moulthrop.

I'm the Chief Executive here at the City Club.

We welcome questions from everyone— City Club members, guests, and those joining us via our livestream at cityclub.org or our live radio broadcast on 89.7 WKSU Ideastream Public Media.

You can text a question to 330-541-5794.

That's 330-541-5794, and my colleagues will try to work it into the program.

Let's go to our first question.

What are the panelists doing in Columbus to get some of the restrictions removed from clean energy, from solar and wind, that has to go through many more hurdles than a comparable oil and gas development would require?

Go ahead.

So, good question.

A question on the availability of different fuel sources to compete and, and anything to remove the limitations that might favor or burden one particular fuel source for another.

Speaking on behalf of the manufacturers, our approach is all the above.

We think all fuel sources have attributes, and those attributes are can be priced through a functioning market, and that the market should choose what attributes, what fuel source they want.

Do you want nuclear?

Do you want natural gas?

Do you want renewable?

Within renewable, there's so many categories— wind, solar, hydro, others.

So that, that is a problem we believe with the market, much more so than the state of Ohio.

We believe the market is doing things that devalue different forms of generation resource, and that has made some of those forms of generation less valuable.

So again, our approach is that the market should choose that, and there are plenty of examples today of major businesses choosing renewable energy or nuclear energy over more conventional natural gas-fired power generation.

If I, I could add to that, and Ohio Business Roundtable agrees, you know, we want to see an all-of-the-above portfolio for the state.

I believe what the question was referencing to was Senate Bill 52, 1 or 2 GAs ago now, that really allowed counties to put a ban on solar and wind development.

And that legislation was intended at a couple bad actors, but really, you know, we're kind of seeing that same type of animosity towards data center development.

And as a state, we really need to kind of start appropriately balancing that local, you know, approval, and which matters, but also making sure that it's not so restrictive that it really sets us back economic development-wise.

Companies want to be able to invest in sustainable renewable energy.

And so if Ohio is restrictive, overly restrictive, in allowing that development to happen, these companies, large companies, members of the Ohio Business Roundtable, still want to make those investments in the sustainable resources.

They're going to be putting that investment in Texas instead using a virtual PPA, power purchase agreement.

They're still going to make the investment in sustainable energy and What we hope to convey to policymakers is let's keep that money in Ohio, and we can do that by helping to release the restrictions surrounding wind and solar development.

There was mention at the beginning of the program about the cost of electricity, and FirstEnergy currently has a 3-year rate plan pending, 22 intervenors, 5 of them are clean energy.

Or environmental groups.

And I was curious about your take in response to some of the points raised where they asked about things where the distribution grid could better accommodate, for example, adding distributed solar or things like more demand response programs, time-of-use programs for the rates, like To— what is your response to trying to get things like those into the rate plan and thus maybe shave the peak and help cut energy prices?

Similar to what everyone's saying, we're all or above.

But at the same time, because of what's happening with affordability and what we need to do as a company, we need to balance what is in a rate case and what is not in a rate case.

And right now we're really trying to prioritize our reliability.

As you know, we do not own generation in the state of Ohio.

It's a deregulated, deregulated market.

So our focus is on the wires and how the wires are performing in terms of just all times, from a blue sky day to other circumstances.

And so when we think about our approach to our rate cases and the problems being focused on now, I think Ohio locally, we're focused highly focused on that reliability aspect.

But we're engaging in other forums, um, like PJM, like at FERC, on some of these broader, bigger issues where we need to advocate on behalf of our customers, um, but don't have that direct control over the generation itself.

And as we get forward, as we move forward, and we, we are, we're meeting our priorities on reliability, that's where we'll fold in and plan on folding in some of those other, other specific elements that are happening and being debated at the, at the more regional federal level.

And once those things are decided, we'll feel comfortable putting those into implementing some of those things in Ohio.

What are we doing in the state of Ohio to protect our grid?

Not very much, regrettably.

These storms are happening and they are not to our satisfaction being studied.

Any time there's an incident that pulls down reliable power, I mean, it's bad for all of us.

But if you're running a manufacturing plant whether it's 24/7 or not, there's a lot of processes that even a micro blip can ruin all of the product.

It could even ruin the machines.

And, and so this is a problem we're especially attuned to going back even to 2022, Winter Storm Elliot.

The, the, the outages were not investigated, at least not in a public manner, not by the state, not by PJM.

And if we don't investigate them, we can't learn from them and we can't innovate.

And make our grid more resilient.

So this is a frustration.

Again, we think this drives part of the affordability reliability problem right now.

Abigail Phillips, you mentioned a second ago that your, you know, your primary concern is how the wires are performing.

So this is the concept of resiliency.

It's kind of like reliability, but it's resilience to the situational and dynamic factors on our grid.

That can be weather and storms.

That can be, you know, we're learning a lot about resiliency actually from the western utilities in terms of how they respond to wildfire and just the basic situational awareness.

So the question is, is what are we doing with technology, which gets back to probably some of the root cause of why there's demand growth.

We're leveraging smarter, more predictive models that can help us understand you know, when weather is coming, where we need to stage, what we need to do, and how we need to respond so we can be more resilient.

And with that, you know, we also have to think about from an affordability standpoint, where are things that we can put on our, our grid, like grid sensors or, you know, predictive vegetation management, that really has that multi-value benefit proposition that helps with reliability and resiliency so we can get out ahead of storms, but leveraging technology to get— make us smarter to say, you know, this, this is what it looked like this time, this is what's predicting and coming, these are, these are the pointed actions you should take.

Because we are concerned about cost and affordability and making sure that the lights stay on but in an affordable manner.

So we're using more of an amalgamation of technology to make us smarter about our situational awareness on our grid, but then also smarter about what investment decisions do we need in various areas to say we need to strengthen this area because we've seen resiliency challenges in this area.

So more, more planning, I would say.

The past 5, maybe plus, years in a row have set a new record for peak demand, and it's predominantly been achieved in the winter.

So, you know, we could put the forecasts aside.

We just look in what's actually happening, what's really come to fruition on the grid.

We have set peak record-breaking demand every winter for the past 5 years.

And PJM does have a lot of flaws that can be a whole nother panel topic for the City Club.

Yeah, but one thing that they have done to that regard is when these, you know, weather events are on the horizon, they put out a peak alert and put the generators on notice that you need to be prepared to go max capacity, whatever your capacity is at your plant, you need to be able to achieve it during this upcoming weather event.

And they had historically not held the generators, from my understanding, to that.

They are able to fine them, and so recently they have actually started to do that to make sure that they— that the generators understand that they need to be able to perform in those weather scenarios.

Thank you.

Go ahead.

I understood that NASA Glenn had to inform CEI of when they turned on their big turbine.

It affects generation, transmission, and local service.

Are there any— if that's still true, I'd like to know, and are there any other industries that would have to pre-notify you through the system that there will be a demand of so much electricity in maybe 20 minutes or so?

So I'm not specifically familiar with that, that, that one example, but back to the forecast and what we need to plan for, we do need to plan for and understand the load in a certain area so PJM itself can have what Alexandra was saying, the right amount of power at the right time to make sure that the grid is stable.

Now, part of what you said is very true.

If there's a huge amount of demand comes on all at once, you know, it's a source and sink that pulls the electrons from somewhere else, or you have to ramp up to provide more power, you know, for a particular area.

And that's done at a zonal level at PJM, and they understand those particular zone points to say, all right, what is this place doing?

Do we need to pull power from here to put it over here?

So that's something that PJM balances.

It's— they balance the system like that.

I am not sure specifically if there's like a big something like that where that's not normal course, whether or not though there are— I'm sure there's a direct line from our customers to PJM through the various various areas to say, all right, we have an abnormality that's going to happen.

We need to make sure that we're managing and balancing the grid at that particular time.

But conceptually, PJM knows by zone where the demand is and how they need to balance that pulling generation supply for where the demand is.

Thanks.

What innovations are we seeing regarding energy storage specifically?

Can Ohio have a bigger role in these solutions as an innovation and manufacturing hub?

There's a lot of innovation happening in the machinery, the technology used not just in generation but in storage batteries, and a lot of new technologies in batteries coming online.

It's the storage capabilities are improving.

And so, you know, this is the hope of innovation.

I'm not qualified to provide a specific example though.

You know, I can't speak to the specific battery technology, but we should continue to try to advance it to ensure that it can support renewable energy in Ohio.

Our setback in that, if compared to southwestern states, is the lack of sunshine.

And especially when you consider that our peak days have been in the winter, that makes it especially challenging for those renewable resources to meet that demand.

So yes, battery technology is a primary way that we are going to be able to embrace more of that on the grid.

But until that happens, those renewable resources cannot be all that we have for Ohio's grid.

Could you speak to how we could speed up the ability of companies to get power quickly?

I would point back to House Bill 15, which was passed at the beginning of 2025, was a landmark piece of legislation when it comes to siting and permitting.

A lot of that speed to market, what the state can do about it, is, uh, relieving that backlog in the siting and permitting queues.

We, for rate cases, we're one of the worst states in the nation, so we're excited that House Bill 15 helped to speed up the rate cases for the utilities at the PUCO.

As far as OPSB, it also put into place shot clocks that keeps them to about 120 to 150 days for that siting and permitting approval.

So we're really excited about that.

You know, they are starting to implement those, and we hope that it does help a lot.

But more reforms are needed on the federal level.

Ryan, if you want to talk about some of the current pending legislation for siting and permitting on the federal level.

Yeah, I just quickly would, would say that, you know, a new very large project comes on, and we're fortunate in Ohio that we have a number of these coming through the pipeline.

Intel's a little less talked about, but it's progressing.

That's exciting.

Down in southern Ohio, there's a very large project, power and data, coming online.

But to us, the question is, are we factoring in the speed to market and the cost to market and the cost to other customers of transmission versus localized generation.

I'm not sure that we are.

Our last question.

So thank you for this excellent forum.

I've got a question for Ms.

Phillips, but what I want to say is I think there's solutions that we haven't been talking about that are cheaper and faster.

And state government tends to have a myopia around incumbent industries, incumbent players, and so we only ever talk about Let's get the people we already know a big payout.

But there are new technologies all over the place, including some that have been discussed— batteries, smart and intelligent appliances— and all of these things, with the help of this modern technology called a smartphone, can talk to each other.

And our time is very short, Tom.

Within 6 months.

So for Ms.

Phillips, um, do you not only evaluate risk but gain of changing how the utility can make money so that we're not just proposing the most expensive and slowest grid replacement, but you could partner with consumers and get it done better and faster in Lakewood and everywhere else?

Thank you, Councilman.

So I always say risk and opportunity are two sides of the same coin.

So I'm— so our company is constantly looking for opportunities to be better, faster, smarter, and get that speed to power that is affordable.

And one of the things that I would say about our industry, just in general, is we don't really compete with one another because we have defined service territories.

And, you know, everyone in our organization collaborates with their peer, their counterpart, and other organizations across the United States that have different challenges.

They learn things at different times.

And we talk on a regular basis about How did you do that?

That looks good.

How did you, how did you make that happen?

Or let me put, put me in touch with that person.

And there's a lot of industry collaboration and then resources like EPRI, EEI, and other organizations that help us do that as well, to say, hey, let me put you in touch with this technology innovation company that this one, this person, this person, and this person has used.

I mean, the challenge with us is that we're highly regulated, so everything is is scrutinized.

So we need to make sure that it's vetted, prudent, and proper before we're going to go out and, and speculate and say, okay, this is a great technology solution.

We're like, we want to compare with our peers of, did this work for you?

How did it work?

Okay, let's do a test case.

Let's figure out if that works and that makes sense.

So what I would tell you is the answer is we're absolutely doing that and we're challenging each other.

I think I mentioned our new leadership.

This is what our new leadership is doing as well.

We're also just collaborating a lot more with industry and with technology companies to say, how can we be better?

How can we be faster?

How can we be more responsive to customers?

And how can we be more affordable?

So we do that all the time.

Abigail Phillips is the Chief Risk Officer at FirstEnergy Corp.

Thank you so much.

Also,thanks to Alexandra Denney of the Ohio Business Roundtable and Ryan Augsburger of the Ohio Manufacturers' Association.

We really appreciate your time today.

Thank you so much.

Before we wrap it up, a quick disclosure I should have mentioned at the beginning is that FirstEnergy is a sponsor of the City Club.

The Ohio Manufacturers' Association isn't yet, though, I noticed.

Neither is the Business Roundtable.

Thank you once again to all of you, members and friends of the City Club.

I'm Dan Moulthrop.

Our forum is adjourned.

Have a great weekend.

For information on upcoming speakers or for podcasts of the City Club, go to cityclub.org.