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Monday, October 7, 2019

Ohio Lawmakers Passed HB6 Earlier This Year, But the Battle Over the Energy Legislation is Still Heating Up

Posted By on Mon, Oct 7, 2019 at 10:51 AM

click to enlarge PHOTO VIA WIKIMEDIA COMMONS
  • Photo via Wikimedia Commons
Most pitched battles over legislation happen while lawmakers are cooking up a bill, during hearings at the State House and protests outside of it.

But a law called House Bill 6 passed by lawmakers this summer to shore up the financial situation of two Ohio nuclear plants, a coal plant in the state and another in Indiana — all while rolling back the state's clean energy regulations — is proving to have a rowdy afterlife.

Groups opposed to HB6 have launched an effort to get it repealed via a statewide ballot initiative, including hiring boots on the ground to collect petition signatures toward that end. Meanwhile, the law's supporters are fighting back, launching commercials and hiring their own crews to argue the law's merits — sometimes using questionable tactics and information critics say is misleading or false.



The law is controversial. An unusual combination of fiscal conservatives, oil and gas companies, environmental groups and others have decried the $150 million per year between 2021 and 2027 ratepayers would provide to First Energy Solutions, a bankrupt subsidiary holding two nuclear power plants — Perry Nuclear Power Plant outside of Cleveland and Davis-Besse Nuclear Power Station outside of Toledo — owned by Akron-based parent company First Energy Corp. That monthly surcharge will cost users between 85 cents for some residential customers and $2,400 for the state's largest industrial users.

First Energy says without the subsidy, the plants will go bankrupt, though First Energy has not supplied lawmakers with particulars about the financials of the plants and there is some dispute about their financial precarity. Other experts who watch the industry, however, have said that the plants probably are in financial distress, pointing out they are often passed over on bids to provide energy on what is called the regional capacity market — that is, contracts to provide extra energy as needed. Ohio's nuclear plants haven't been able to match prices from renewable energy and natural gas plants of late in that market.

Another $1.50 a month from residential customers and up to $1,500 per month for commercial users will go to provide $20 million a year to the coal plants, which are run by the Ohio Valley Electric Corporation. Those plants provide power in mostly rural areas and are also floundering financially, OVEC says.

But fear not, the mostly Republican lawmakers who approved HB6 say — the law will actually save ratepayers money and will raise about $20 million for solar energy in Ohio. It does so, however, by significantly reducing the amount of renewable energy power providers would be required to generate up to 2026, when the requirements would be eliminated entirely. The law would also eliminate energy efficiency mandates next year.

Those decade-old mandates are responsible for about $4.75 on the average ratepayer's monthly bill, the law's supporters say. Getting rid of the mandates, they say, will save ratepayers more than $3.75 a month on their bills by 2027.

Environmentalists, however, say that is misleading and point to research from Ohio State University and elsewhere showing that those renewable energy and energy efficiency mandates over time reduce energy costs — as well as cut carbon emissions that contribute to climate change.

Supporters of the subsidy point out that nuclear energy is a low-emission alternative to fossil fuels and that saving the two nuclear plants is a necessity. They also say that closing the plants will cost the state more than 4,000 jobs, including 1,400 union jobs at the plants. But opponents say that HB6 amounts to a bailout and that Ohio's clean energy provisions shouldn't be scrapped to pay for it, especially when the state's clean energy industry has created more than 112,000 jobs statewide.

Ohio Gov. Mike DeWine signed HB6 into law on July 23. End of argument, right? Not by a long shot.

As an effort by anti-HB6 group Ohioans Against Corporate Bailouts to get the 265,744 valid signatures necessary to land a referendum on the state ballot kicked off, a group called Ohioans for Energy Security fired a salvo back at the law's critics in the form of a 60-second commercial that began running in late August on broadcast and cable TV and radio. That ad accused natural gas interests of being behind the opposition to HB6 and further asserted that those interests represented an attempt by the Chinese government to take over Ohio's energy grid.

The ads feature grim, desaturated footage of Chinese leaders while a narrator intones, "They took our manufacturing jobs. They shuttered our factories. Now, they're coming for our energy jobs. The Chinese government is quietly invading our American electric grid, intertwining itself financially in our energy infrastructure. Now, a special interest group boosting Chinese financial interests is targeting Ohio's energy… in the coming weeks, you may be approached on the street or at your door to sign a petition to defund U.S. jobs and energy."

Neither Ohioans Against Corporate Bailouts nor Ohioans for Energy Security, which are both LLCs, have disclosed who is funding their campaigns. The pro-HB6 group bases its "foreign takeover" narrative on the fact that natural gas companies that oppose HB6 have borrowed money from the Industrial and Commercial Bank of China to build three of Ohio's four natural gas plants.

But those loans involved more than just the ICBC — 10 other banks from across the globe are tied up in the financing of those plants.

What's more, First Energy, which owns the nuclear plants bailed out by HB6, has received $161 million from ICBC and other international banks, according to the company's 2018 filing with the U.S. Securities and Exchange Commission.

The ads — and an army of counter-petitioners engaging the public with similar talking points — do not mention First Energy, the benefits it will reap from HB6 or its own borrowing from Chinese banks.

The interaction between referendum petitioners seeking to get signatures to challenge HB6 and those hired to oppose them has at times gotten heated. After multiple reported incidents of so-called "petition blockers" acting aggressively toward those gathering petitions surfaced, Ohio Attorney General David Yost late last month warned that so-called "petition blockers" would face prosecution unless they "knock it off."

“We have anecdotal evidence that there have been instances where it’s actually escalated,” Yost said during a news conference regarding reports of interference. “One instance where someone may have been struck, another instance where people may have been surrounded by multiple petition blockers, another instance where maybe there was somebody who was followed into another town.”

The controversy intensified Oct. 5, when Yost acknowledged that his office is looking into reports from Ohioans Against Corporate Bailouts that pro-HB6 petition blockers have offered to purchase signed anti-HB6 referendum petitions from those paid to collect them. That's a fifth-degree felony in Ohio. Yost's office has said that, for now, those reports are "rumors."

Ohioans for Energy Security representatives have denied those paid by the group have engaged in wrongdoing.

There have also been a few reports of aggressive pro-HB6 activists here in Cincinnati, and three people from out of town were arrested at Cincinnati State Technical and Community College this week while engaging in pro-HB6, anti-referendum activities. The three say their First Amendment rights were violated by Cincinnati State campus police and that they complied with all orders issued by the officers. Campus officials said that the activists were aggressive and refused to leave when asked to do so. At least one of the petitioners has threatened to sue Cincinnati State.

The big fight over HB6 comes after years of lobbying by First Energy and those with ties to the coal plants in question for subsidy — at first from the federal government, and, when that failed, from the state of Ohio.

First Energy has been one of the state's most prolific political donors, and last year was no different. The company and its employees contributed more than $62,000 to the election campaign of now-Governor DeWine, $160,000 to various parts of the Ohio Republican Party, $38,000 to the Ohio Democratic Party and hundreds of thousands of dollars to state lawmakers as they ran for reelection or leadership positions.

State House Speaker Larry Householder and his allies received more than $154,000 in 2018 from First Energy, helping boost Householder into the speaker's seat. Some coal-aligned interests who stand to benefit from the bailout of the two OVEC plants also donated big money to various lawmakers' campaigns.

Lawmakers, of course, say that campaign donations don't influence how they vote or what laws they choose to pursue. HB6's critics, however, take a dimmer view.

The company also spent some $2.7 million on lobbying for HB6 last year, according to disclosures, and hundreds of thousands on ads supporting the bill. Another group that doesn't have to disclose its donors called Generation Now spent an additional $4.6 million on ads supporting HB6 before its passage.

The battle over HB6 will continue for at least a few more weeks.

Ohioans Against Corporate Bailouts must gather the needed signatures by Oct. 21 to land its attempt to repeal HB6 on next year's November ballot. It is likely the tension will continue until then — and well beyond if the group manages to get its challenge to HB6 on the November ballot.

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