Just one last General Assembly roll call, likely on Aug. 1, is all that stands between Ohio electricity customers’ wallets and the cashbox of FirstEnergy Solutions’ Ohio nuclear power plants.
On Wednesday, the state Senate passed House Bill 6, the FirstEnergy Solutions nuclear subsidy plan. If the House finalizes HB 6 on Aug. 1, the monthly bills of Ohio’s electricity customers would, through 2027, include a customer charge to subsidize FirstEnergy Solutions’ Perry (Lake County) and Davis-Besse (Ottawa County) nuclear plants.
Greater Cleveland state senators who voted “yes” on HB 6 were Senate President Larry Obhof, a Medina Republican; Senate Minority Leader Kenny Yuko, a Richmond Heights Democrat; and Sens. Matt Dolan, a Chagrin Fall Republican; John Eklund, a Munson Township Republican; Kirk Schuring, a Canton Republican; and Sandra Williams, a Cleveland Democrat.
Ohio electricity customers’ bills would also, through 2030, include a subsidy for two coal-fueled power plants owned by Ohio Valley Electric Corp. (Its owners include Dayton Power & Light Co.; Duke Energy Corp.; FirstEnergy Corp.; and American Electric Power Co.) One plant, Kyger Creek, is in Gallia County, Ohio. The other, Clifty Creek, is in Madison, Indiana – about an hour-and-a-half west of Cincinnati.
Democratic-run New York, New Jersey, Connecticut and Illinois already require their states’ electricity customers to subsidize nuclear power plants. Pennsylvania, with a Republican-run legislature and Democratic governor, has refused, so far. Too bad; maybe Pennsylvanians could have helped subsidize an Ohio power plant the way HB 6 would make Ohioans help subsidize an Indiana power plant.
In fairness, HB 6 could save Ohio’s electricity customers at least some money, according to the Legislative Service Commission, because HB 6 would reduce or eliminate some current electric utility charges.
Netting those dollars out, LSC analysts estimated that a FirstEnergy Illuminating Co. residential customer would pay $3.88 less a month (or $47 less a year) for electricity beginning in 2021, then, beginning in 2027, $4.89 less a month (or $59 less a year). A FirstEnergy Ohio Edison residential customer would pay $1.68 a month less ($20 less a year), then $2.69 a month less ($32 less a year). And an AEP residential customer would pay $3.52 a month less (or $42 less a year), then $4.37 a month less (or $52 less a year). (Annual amounts have been rounded.)
But those estimated savings don’t take this into account: Thanks to state law, and a 1957 ruling by Ohio’s utility-friendly Supreme Court, Ohio utility customers don’t get refunds if a utility’s rates are later overturned. “Since 2009 … Ohio consumers of electric utilities have been denied about $1.2 billion in PUCO-approved utility charges that the [Ohio] Supreme Court has found to be improper,” the Ohio Consumers’ Counsel’s board reported last week. That is, the utilities get to keep the money.
By the way, the new state budget Gov. Mike DeWine signed this week doesn’t give the Consumers’ Counsel, which represents Ohio’s residential utility customers in utility rate cases, even one penny more for its operating costs this new fiscal year than the counsel’s office got last fiscal year. That’s Ohio’s legislature – always looking out for the consumer.
Would residential customers’ bills go up, or down, in a completely competitive national electricity market, without Ohio’s nuclear subsidy? They’d likely go down. In April, the latest month available, the Energy Information Administration said the cost of 1,000 cubic feet of Ohio natural gas sold to electric power consumers was $2.68; it was $4.68 five years before that. Electric utilities’ fuel of choice is getting cheaper and cheaper.
Yes, leaving aside radioactive waste, nuclear plants don’t pollute. True also, shutting down Perry and Davis-Besse – inevitable, FirstEnergy Solutions says, unless HB 6 becomes law – would cost Lake and Ottawa countians jobs. But FirstEnergy Solutions’ shutdown threats imply the plants aren’t profitable. That’s not a given.
And there’s this: FirstEnergy Solutions is emerging from bankruptcy. If speculators bought FirstEnergy bonds, etc., at fire-sale prices, what happens to the value of those investments if the General Assembly makes Ohioans pump cash into FirstEnergy Solutions? Here’s what the Ohio Manufacturers’ Association says: “[HB 6] contains nothing to protect customers. Instead, it would protect investors who own the [nuclear plants], providing them staggering profits.”
Party on, Wall Street.
Thomas Suddes, a member of the editorial board, writes from Athens.
To reach Thomas Suddes: tsuddes@cleveland.com, 216-999-4689
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