Ohio’s legislature Tuesday finally passed the controversial bill to subsidize FirstEnergy’s two Ohio nuclear plants (and two coal-fired plants, one in Indiana and the other in Ohio, operated by the Ohio Valley Electric Corp., jointly owned by several regional investor-owned utilities). The legislation, which Republican Gov. Mike DeWine quickly signed into law Tuesday afternoon, will give the Davis-Besse and Perry plants about $150 million in ratepayer dollars annually to keep operating.
The five-year-old legislation (House Bill 6) appeared stalled last week after passing the state Senate. It failed to come up for a vote in the House, because absentees in last week’s session meant the bill could not muster the 50 votes necessary to pass. But the Republican leadership in the House was able to wrangle up the needed votes today and the Senate measure passed by 51-38.
The new law will not only subsidize nuclear and coal plants that have had a hard time bidding into competitive wholesale markets, but will also scale back and change the state’s approach to renewables, eliminating a mandate for the state to acquire renewable energy generation after 2026. It would also end the state’s energy efficiency mandates.
Environmentalists and renewable energy advocates were scornful of the new Ohio law. The American Wind Energy Association described it as “another significant setback for Ohio’s clean energy market,” noting that the a 2014 law established restrictive zoning provisions for wind power.
Some free market advocates also opposed the state bailout. The Washington-based R Street Institute wrote back in May, “In our experience, requiring customers to subsidize producers does not typically result in lower costs for customers. While HB 6 would relieve customers of the obligation to pay subsidies for certain renewable technologies, the cost of these obligations is typically lower than the price customers would have to pay for nuclear units under HB 6.”
But supporters insisted that the bailout would save customers money. Republican State Rep. Bill Seitz, speaking on the floor, said it would save Ohioans $640 million. “It cannot bare overemphasis enough — this is a bailout for the ratepayers,” he said. “Who benefits from this bill? Ratepayers. I can’t conceive of anyone who would vote against saving your constituents that amount of money.” He added that the changes in renewable energy and energy efficiency rules change mandates to incentives. “We’re simply choosing to incentivize renewables instead of mandating renewables.”
— Kennedy Maize