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FirstEnergy still wants aid; Ohio House halts hearings

$300M a year sought to subsidize nuclear power plants

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    Power lines outside of the Davis-Besse Nuclear Power Station east of Toledo.

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    Jones

COLUMBUS — FirstEnergy’s president on Thursday sought to keep legislation on track in the Senate to authorize up to $300 million a year in customer subsidies for its two struggling nuclear power plants even as the House has halted hearings.

“I don’t think it necessarily puts an end to it [in the House], but I didn’t think anything was going to get done in the short term here either,” Chuck Jones said after testifying before the Senate Public Utilities Committee.

“We’re going to keep working it,” he said. “We’re going to keep talking to them.”

Senate Bill 128 and an identical measure in the House would create Zero Emission Nuclear credits, financed by Akron-based FirstEnergy’s customers, to generate an estimated $300 million a year for the two nuclear power plants operated by subsidiary FirstEnergy Solutions.

Company officials have warned that the money-losing Davis-Besse plant near Oak Harbor and Perry plant east of Cleveland could be permanently shuttered absent a guaranteed market for the more expensive power they produce.

The plants have been unable to compete economically with cheap and abundant natural gas.

The amount would be capped at 5 percent, translating into about $5 more a month on a typical residential customer’s bill of $125 in FirstEnergy’s northern Ohio territory

The subsidies, extrapolated over the full potential 16-year life of the credits, could total $4.8 billion, assuming FirstEnergy’s Beaver Valley nuclear power plant on the Ohio River shore in Pennsylvania is not deemed eligible for the credits.

The chairman of House Public Utilities Committee, Rep. Bill Seitz (R., Cincinnati), said he will not continue hearings on the identical House Bill 178. But he stressed this doesn’t mean the issue is dead.

“The Senate has given this about an hour and a half of hearings so far,” he said. 

“So far, we’ve given it about 12 hours, over 40 witnesses. It’s beginning to get repetitive. ... We’re giving it a break.”

He has floated the idea of allowing customers to opt out of paying for the credits, similar to what the House did with a recently passed bill that would weaken subsidies for wind, solar, and other renewable sources. 

“I actually put that out on Front Street and some candidly said that’s a good idea,” Mr. Seitz said. “I don’t believe FirstEnergy thinks it’s a good idea. It’s a way forward. Grant you, as people opt out, [FirstEnergy gets] less than the $300 million they’re asking for.

“But if every African-American church in Cleveland and every labor union member in Ohio is for this, that gave us the idea,” he said, referring to some of those who’ve testified in favor of the bill.

Sen. Bill Beagle (R., Dayton), chairman of the Senate committee, plans to continue hearings through June, but he’s not talking about a vote anytime soon.

The issue of a potential FirstEnergy Solutions bankruptcy hovered over the Senate hearing. Afterward, Mr. Jones stressed that FirstEnergy Solutions has been spun off with its own board that will make those decisions.

“They’re looking at that right now,” he said. “That decision could come at anywhere between today and six months from now. ... Even if that happens, and there’s no future for these plants to be part of FirstEnergy, I will continue to fight for this legislation because it’s still the right thing to do.”

He has argued that Ohio should value these plants for their 4,300 direct and indirect jobs, as energy suppliers that do not directly contribute to carbon air pollution, and as a reliable energy source that adds diversity and security to Ohio’s electricity grid.

Opponents counter that FirstEnergy is asking customers to bail out the company for poor business decisions to double down on nuclear and coal before hydraulic fracturing opened up abundant reserves of shale natural gas. FirstEnergy owns no natural gas plants.

“[FirstEnergy customers are] going to be the only ones paying for this, but everyone else is going to get the benefit,” Sen. Sean O’Brien (D., Cortland) said. In Illinois and New York, the credits are spread across all electricity customers in those states.

“The decision [to halt House hearings] reflects the growing, diverse coalition that is challenging unnecessary subsidies to FirstEnergy, which would raise electricity rates and hurt the state’s economy,” said Dick Munson, director of Midwest Clean Energy. 

“We hope Ohio policymakers will instead focus on spurring investment and innovation in reliable, efficient, and clean energy markets.”

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.

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