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Inside Sources: Green Energy, Industry Advocates Call Ohio Bill a Bailout for Nuclear Energy

Posted by Michael McGrady on Apr 25, 2019

Inside Sources focuses on an Ohio bill that many are calling a bailout for nuclear energy, noting AEE's opposition and including AEE's Ray Fakhoury's comments. See excerpts below and the entire Inside Sources story here:

Republican lawmakers in Ohio are under fire over a bill intended to create a clean air program but denounced by energy industry and environmental advocates as a “bailout” for the state’s nuclear energy industry. House Bill (HB) 6, proposed by Reps. Jamie Callender, R-Concord Township, and Shane Wilkin, R-Hillsboro, would establish the Ohio Clean Air Program to incentivize the state’s dynamic energy economy to build and maintain zero and reduced emissions generation facilities to fight climate change."The good news for electric customers is that for many, their bills will actually go down,” under this legislation, said Rep. Callender, chair of the state House Public Utilities Committee. HB 6 offers incentives to producers of nuclear and other clean energy such as wind, solar and hydroelectric. These incentives would be funded by consumer surcharges...

According to the proposed legislation and analysis from the Ohio Legislative Service Commission, residential customers will pay $2.50 per month. That surcharge is a decrease from the current $4.39 per month for existing payment mandates. Commercial consumers will pay around $20 per month, and industrial or “very large” energy consumers will pay from $250 per month to $2,500 for consumption above 45 million kilowatt hours per year. These consumer surcharges would generate more than $300 million for the clean air program managed by the Ohio Air Quality Development Authority. In turn, participating producers would receive $9.25 for every megawatt of zero or reduced-carbon energy produced.

Opponents point out that two failing nuclear facilities along the coast of Lake Erie could receive hundreds of millions of incentives under the program. Based on calculations from several media outlets, more than half of all generated revenues would go to the nuclear facilities managed by FirstEnergy Solutions. The company, a former generation subsidiary of the publicly-traded FirstEnergy Corp. based in Akron, Oh., filed for bankruptcy in March of 2018. Soon after, FirstEnergy Solutions announced the closure of the Perry nuclear power plant, near Cleveland, and the Davis–Besse plant, near Toledo. Nuclear interests support the legislation...

Organizations representing competing energy sectors and other industries oppose the legislation. For example, Advanced Energy Economy (AEE), a membership organization that advocates for energy innovation and features members like Facebook, Amazon, Apple, and dozens of next-generation energy firms, oppose the bill.

“This bill distorts the market – picking winners and losers instead of allowing all energy resources to compete on cost and performance,” Ray Fakhoury, the principal of AEE, wrote in an email. “This bill is going to raise rates on consumers, without delivering new investments in advanced energy resources – indeed, it will rob Ohio of those new investments to extend the lives of two money-losing power plants...”

If the bill is passed and signed into law, Ohio joins lawmakers in  New York, Illinois, Connecticut, and New Jersey in passing state clean air programs that subsidize nuclear energy generation facilities. On questions of nuclear energy’s role in clean and renewable generation, the U.S. Department of Energy endorses nuclear power as a sustainable reduced-emissions energy product.

See the entire Inside Sources story here.

Topics: AEE In The News