Ohio Legislators Introduce FirstEnergy's Nuclear Power Plant 'Bailout' Plan

[image-1]For years now, FirstEnergy has lobbied the Public Utilities Commission of Ohio and, invariably, state legislators in support of what many have called a nuclear power plant "bailout": increased rates for customers, who will ostensibly foot the bill of FirstEnergy's competition with newer, cleaner energy production sources in the state. Rates would increase by at least five percent across the company's customer base.

Senate Bill 128 would generate some $300 million in annual revenue for the Akron-based energy company. That windfall would come through rate hikes forced onto electricity customers across Northeast Ohio. As FirstEnergy itself and plenty of energy stakeholders in Ohio have noted, the company really needs the money to stay afloat — hence critics' use of the word "bailout." It's been argued time and time again that the state, even now by introducing SB 128, is actively interrupting free-market forces and acting on behalf of the private company.

FirstEnergy runs Perry Nuclear Power Plant and Davis-Besse Nuclear Power Station, though the company has signaled intent to sell both facilities by mid-2018. According to the company, "approximately 90 percent of Ohio's carbon-free electricity and 11 percent of the power consumed in Ohio" is produced at Perry and Davis-Besse each year.

Encased in the bill is a provision that would force a closer look at those "zero-emissions credits" in the event that FirstEnergy sells the plants and would likely reduce them based on whatever revenue has been generated by that point. (The bill allows for the increased rates to stand for at least 16 years, and it's unclear how dramatically the rates would change if FirstEnergy does sell.)

The company, giddy over the news that the State Senate had taken up this bill, has its supporters, of course. State Sen. John Eklund, R-Munson Township, who introduced SB 128, says that the financial viability of FirstEnergy is intrinsically tied to the region's well being. “Closing them would impact thousands of families, result in painful job losses and jeopardize tax dollars that help fund local governments, schools and vital community services," he said. "We can’t stand by and let that happen in Ohio.”

Elsewhere, opponents deride the bill and the years-long debate as a step in the wrong direction. The Ohio Manufacturers Association, for example, took a stand against the bill: “FirstEnergy should not be allowed to prop up its business on the backs of Ohio consumers. While manufacturers support nuclear power as part of an all-of-the-above energy portfolio, Senate Bill 128 is wolf in sheep’s clothing. We will actively work to oppose this misguided bill.”

It's likely that the SB 128 debate will serve as another proxy for the state's back-and-forth stances on clean energy standards. Gov. John Kasich last year vetoed a renewal of the state's freeze on those renewable energy standards. Not long after, State Rep. Bill Seitz, long a champion of the free market ideology, ushered a bill into the House Public Utilities Committee, a bill that would totally get rid of renewable energy mandates and allow the state to press its thumb on the scales of the energy production market.