With the Trump administration’s efforts to prop up coal and nuclear capacity having stalled, Ohio legislators are looking to throw a lifeline to FirstEnergy’s nuclear plants.
Ohio state lawmakers are moving ahead on a bill that would gut the state’s renewable energy and energy efficiency funding in order to bail out nuclear power plants owned by bankrupt utility FirstEnergy Solutions and maintain customer charges for coal plants. The bill has drawn condemnation from clean energy and environmental groups, but support from the Trump administration.
On Wednesday, House Bill 6 passed the Ohio House of Representatives by a 53-43 vote, allowing it to move to the state’s Senate.
While the bill’s ultimate chances of passage remain unclear, the Senate is controlled by Republicans, and Republican Gov. Mike DeWine has said he supports it.
The bill would eliminate Ohio’s renewable portfolio standard of 12.5 percent by 2027, passed in 2008, which has been under attack from state Republicans for years. It would also eliminate the nearly $200 million per year, collected in surcharges of roughly $1.69 per month on Ohio utility customers, to fund energy efficiency and demand-reduction programs, which have saved Ohio customers $5.1 billion from 2009 to 2017, according to the Midwest Energy Efficiency Alliance.
Instead, HB 6 would add a $1 monthly surcharge to support two nuclear power plants — the Davis-Besse plant near Toledo and the Perry plant near Cleveland, which FirstEnergy Solutions has threatened to close by 2021 — as well as extend a $2.50 per month charge through 2030 for Ohio Valley Electric Corp. to support coal plants owned by a consortium of utilities.
The bill calls this funding mechanism a “Clean Air Program.” But its result would be to gut the state’s clean energy laws and lock in its reliance on fossil fuels, according to analyses by the Union of Concerned Scientists, The Sierra Club, and other opponents.
The bailout proposal is one long sought by FirstEnergy Solutions, which filed for Chapter 11 bankruptcy protection in March 2018, shortly after asking the U.S. Department of Energy to issue an emergency declaration to support its ailing nuclear and coal fleet.
While FirstEnergy and the Trump administration have argued the plants are critical to keeping the regional power grid stable, multiple studies from PJM indicate the closures won’t affect grid reliability. And despite support from some key Trump backers, the reported plans at DOE to use wartime emergency power to force out-of-market payments to these plants appear to have stalled.
That’s left Ohio lawmakers as FirstEnergy Solutions’ remaining hope for a potential bailout. Early drafts of legislation to keep FirstEnergy from closing its Ohio plants first surfaced in April, in the form of an Ohio Senate bill that bore the same fundamental features as House Bill 6, although it lacked some of HB 6’s more recent additions.
According to Cleveland.com, these changes include a provision to allow residents in unincorporated areas of Ohio to hold a referendum to block a state-approved wind-energy project in their area, even after construction has begun. And Wednesday’s passage of the bill was secured after some last-minute changes, including allowing six utility-scale solar farms certified by state siting officials to receive the same “clean air” subsidies as the nuclear and coal plants designated in the bill.
Other last-minute changes included a cap on the subsidies FirstEnergy’s nuclear plants could collect should electricity prices increase — a key concern for the bill’s consumer advocate and free-market opponents who worry that the $1 per month surcharge could rise.
Lawmakers also put a limit on the potential property tax devaluation of FirstEnergy’s nuclear plants, to avoid a repeat of the company’s 2017 devaluation of its Davis-Besse nuclear plant, which devastated local tax revenues.
The Trump administration has put pressure on Ohio lawmakers to pass House Bill 6, according to Politico, which reported that Trump reelection official Bob Paduchik called at least five members of Ohio’s House of Representatives to push the bill in the days before its passage.
Ohio’s plan stands in stark contrast to the nuclear incentive programs that have been rolled out in states such as Connecticut, New Jersey, New York and Illinois, which are built on existing state clean energy and carbon-reduction policies.