The on-again, off-again Ohio legisltive battle over a $150 million-per-year FirstEnergy nuclear bailout is off again, at least until August. The five-year-old legislation – House Bill 6 – often revised in the years since it was introduced and produced bipartisan contention between the state House and Senate, looked like it was headed to passage last week.
On Monday, the Ohio Senate passed its revised version of the bill 19-12 to prop up the finances of the bankrupt Davis-Besse and Perry nuclear plants in the Buckeye State, while scaling back the state’s modest renewable energy goal from 12.5% of power generation by 2027 to 8.5% by the end of 2026. It was then headed to the Ohio House, where supporters believed they had the votes to pass it quickly, sending it on to Republican Gov. Mike DeWine, who had said he will sign it into law.
But that was not to be. The controversial legislation needed all the votes it could get in the House, where it had to get a 50-vote majority. The GOP leadership was unable to muster the votes, as four “yes” votes had fled Columbus on Wednesday, leaving supporters one vote short of the magic 50. One of the previous “yes” votes retired. Three other presumed affirmative votes – two Democrats and one Republican — didn’t show up.
Republican House Speaker Larry Householder said, “We tried to see if we could round up enough votes to get to 50, and we were a little bit short.”
That has given opponents another opportunity to make their case against the nuclear bailout, which would also end the state’s energy efficiency and renewable energy mandates, according to the Senate committee that review the bill.
FirstEnergy Solutions, one of the spin-off companies from Akron-based FirstEnergy which is in bankruptcy proceedings, has claimed that the two nuclear plants are losing money, although they have provided no specific data to support the claim. That has led opponents to charge that the company is blowing smoke and the units are turning a healthy profit, so the bailout will be just another transfer from customers to the utility’s bottom line.
Environmental Defense Fund regulatory attorney John Finnigan wrote, “In his June 29 testimony, Michael Haugh of the Ohio Consumers’ Counsel showed that the two nuclear units earned a combined profit of $50 million since the company filed for bankruptcy.” Local opponent and public relations executive Jeff Barge in Crain’s Cleveland Business cited a study by Paul Sotkiewicz, former chief economist for PJM Interconnection LLC, the largest U.S. power grid operator in the country. That study, he said, “which was commissioned by oil and gas group API Ohio, said the Davis-Besse and Perry nuclear plants generated annual profits of $28 million and $44 million, respectively, and are ‘among the most profitable of their kind in the nation.’ Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, said Sotkiewicz is a ‘credible’ expert.”
FirstEnergy has made a number of questionable claims during the lobbying over the bailout, including that bankruptcy proceedings prevent it from disclosing its financial statistics, which several experienced bankruptcy lawyers say is bogus. FirstEnergy also told the legislature it needed a decision by June 30 so it could buy nuclear fuel for Davis-Besse. Otherwise, it would close the plants and lay off some 400 workers. That was a calculated deception, as the company acknowledged in Securities and Exchange Commission filings, “Enrichment services are contracted for essentially all the enrichment requirements for nuclear fuel through 2020…. Fabrication services for fuel assemblies are contracted for … Davis-Besse (reactor) through 2024.”
— Kennedy Maize