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Nuclear plant bailout debate kicks off at Statehouse

More than 30 minutes passed during Tuesday’s initial hearing on the General Assembly’s plan to provide about $150 million a year to FirstEnergy Solutions before anyone mentioned the bankrupt company or its slated-to-close nuclear power plants in Ohio.

Sponsors of House Bill 6 talked about lowering the carbon footprint in the state, reducing monthly costs for energy users and creating stability.

“Let’s face it, the low-hanging fruit of energy-efficiency programs has been taken advantage of and come and gone,” said Rep. Shane Wilkin, R-Hillsboro. “The time is now to move forward and stake our claim as an energy producer and exporter here in the Midwest.”

Then Rep. Michael O’Brien, D-Warren, noted that several newspapers in Ohio were referring to the bill as a bailout for the corporation that split from Akron-based FirstEnergy. Rep. Jamie Callender, R-Concord, the other primary bill sponsor, called it the “white elephant in the room.”

“Do the nuclear plants in northern Ohio benefit from this? Absolutely, yes. Will it save the nuclear plants? I have no idea,” he said.

The state would pay companies $9.25 for every megawatt hour of energy produced with zero carbon-dioxide emissions, be it nuclear, wind, solar or hydro. FirstEnergy would be in line for about half of the estimated $300 million raised annually via fees attached to consumer electricity bills.

Those monthly fees would range from $2.50 for residential customers to $2,500 for major industrial users. In exchange, lawmakers would do away with the state’s current energy and efficiency standards and the monthly fees that go with them.

The Legislative Service Commission estimates those fees average $4.39 per month for residential customers, so ratepayers would save $1.89 per month. For AEP customers, however, those fees average $3.59 for its customers, for a savings of $1.09.

The state analysis also says that Dayton Power & Light customers would pay 61 cents more under the proposed $2.50 fee.

Under the bill, the state also is expected to design a program to subsidize coal and gas power plants that improve their emissions.

Rep. David Leland, D-Columbus, asked the sponsors whether they could specify how the $9.25-per-megawatt hour was developed.

“No,” Callender said. “We’re dealing with some complex issues and coming up with an exact number is not an exact science.”

Leland later remarked that he was “totally surprised” that it was not explained how the number was calculated. “Some cynics might say that maybe somebody made a call somewhere to see exactly how much somebody needed.”

Leland defended the current energy-efficiency standards for creating jobs.

“I don’t know that taxpayers should be paying this nuclear bailout tax to rescue these companies, especially when it doesn’t benefit them in any way,” Leland said. “It’s just a multimillion-dollar gift to a company that can’t make it on its own.”

FirstEnergy Solutions, which is trying to work its way out of bankruptcy, has said that its two nuclear plants in northern Ohio are likely to close within two years without financial help.

House GOP leaders want to replace Ohio’s current energy standards that they argue haven’t worked. After a dozen years under the standards, Callender said, only about 3% of electricity generation here comes from carbon-free sources.

“We’re competing with generation facilities in states that have huge state supplements,” Callender said.

In its efforts to secure a bailout for two nuclear plants in Ohio and one in Pennsylvania, FirstEnergy Solutions has spent millions on lobbying and public-relations firms in the two states, according to the Energy and Policy Institute, which examined the company’s bankruptcy filings.

In the past two-year election cycle, FirstEnergy political-action committees and executives donated just over $1 million in disclosed contributions to Ohio candidates and party funds — about 90% to Republicans. That does not include potential contributions to dark money groups.

The number includes $124,300 to Republican Gov. Mike DeWine’s campaign and his transition fund. House Speaker Larry Householder, R-Glenford, received $43,100 in direct contributions and his supporters got tens of thousands more.

Rep. Dick Stein, R-Norwalk, co-chairman of the subcommittee that will begin hearings on the bill Wednesday, said he’s looking for more clarity.

“I have some questions about how we unwind the existing (energy mandates), and is there going to be additional costs borne by the ratepayer as a result of that,” he said.

The bill says energy customers would continue to pay renewable, efficiency and peak demand charges if they are part of prior contracts by their power company. “Certainly that is an area that has to be worked through,” Stein said.

Stein noted that 90% of power generated in Ohio via carbon-free emissions comes from the two nuclear plants. He added that wind power companies could qualify for $16 million per year with their current generation.

“That gives them the ability to do more, to increase their capacity,” he said. “This new program, I think, has more potential benefit for increasing speed of implementation than the (current) program.”

Read the original article here: The Columbus Dispatch

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