Picking Losers: Ohio Energy Bill is a Dumpster Fire

July 28, 2019

There is certainly an argument for keeping existing nuclear plants open, if the needed subsidies don’t crowd out funding for renewable energy, as the video above explains.

But subsidizing a pair of nuclear plants, AND old coal plants, like Ohio just did – is pretty hard to take – and transparently corrupt.

Vox:

The bill, just signed by Republican Governor Mike DeWine, is called HB6. Though the story behind it is complex and sordid, the bill itself is pretty simple. It would do four things:

Bail out two nuclear plants: From 2021 until 2027, Ohio ratepayers will pay a new monthly surcharge on their electricity bills, from 85 cents for residential customers up to $2,400 for big industrial customers. The surcharge will produce about $170 million a year. $150 million of that will be used by the utility FirstEnergy (one of the largest investor-owned utilities in the country) to subsidize its two big nuclear power plants — Davis-Besse, outside of Toledo, and Perry, northeast of Cleveland — which it claims are losing moneyand will be closed in the next couple of years without bailouts. The remaining $20 million will divided among six existing solar projects in rural areas of the state. (Note: as we’ll discuss below, nuclear power plants generate low-carbon energy and are worth saving. But not like this.)

Bail out two coal plants: FirstEnergy customers across Ohio will pay an additional monthly surcharge ($1.50 for residential customers; up to $1,500 for big industrials) to help bail out two old, hyper-polluting coal plants owned by the Ohio Valley Electric Corporation (a collective owned by several large utilities), one in Ohio, one in Indiana. 

Gut renewable energy standards: Ohio has one of the oldest renewable portfolio standards in the country, requiring its utilities to get 12.5 percent of their power from renewables by 2027. The bill reduces the target to 8.5 percent by 2026, exempts large industrial customers, and kills the standard after 2026, effectively nullifying any incentive for new renewable energy development in the state.

Gut energy efficiency standards: Ohio utilities are required to reduce customers’ energy use 22 percent from 2008 levels by 2027 through energy efficiency programs (which were set to save Ohio ratepayers $4 billion over the next 10 years). HB6 allows utilities to abandon those programs entirely once they hit 17.5 percent, a level most have almost reached already. 

To summarize: the bill would subsidize four uncompetitive power plants, remove all incentive to build more renewable energy projects, and cancel efforts to help customers use less energy. It is a bill only a utility (and the lawmakers who do its bidding) could love, an extravagant gift to FirstEnergy investors that hoses Ohio ratepayers. (FirstEnergy’s stock price has been rising all year, despite, or perhaps because of, its 2018 bankruptcy.)

Despite a tsunami of dark money supporting the bill, HB6 was overwhelmingly opposed by ratepayer groups, business groups, free-market conservative groups, environmental groups, and Ohioans generally. Its only support came from its only beneficiaries: the utilities that own the bailed-out plants, the employees of the bailed-out plants, the communities where the bailed-out plants are located, and possibly Donald Trump, who doesn’t want to see coal plants closing during his reelection campaign.

Above article is longer and well worth reading or bookmarking.

Inside Climate News:

“This is one of the worst pieces of energy related legislation we’ve seen,” said Dan Sawmiller, Ohio energy policy director for the Natural Resources Defense Council.

His group was one of many across the business and political spectrum that fought the bill, a rare moment in which environmental advocates such as the Sierra Club were on the same side as the American Petroleum Institute.

“We are bailing out a corporation, a failing corporation,” while harming the growing wind and solar industries, said Rep. Casey Weinstein, a Democrat.

He said the legislation would steer solar and wind investment away from Ohio and toward neighboring states such as Michigan. Other states, including South Carolina and Georgia, are being much more forward thinking about renewable energy, he said.

Columbus Dispatch:

There’s nothing wayward about it — the donations are legal and disclosed — but you can safely say FirstEnergy Corp. realized a good return on its investment in Ohio politicians.

The Akron-based utility and its employees gave nearly $1 million to legislators, other officeholders, candidates and political parties prior to winning narrow passage of the bill granting FirstEnergy Solutions around $1 billion over seven years to underwrite the pair of Lake Erie nuclear power plants it threatened to close.

The controversial residential ratepayer-paid bailout — 85 cents a month from 2021 though 2027 — came amid a flood of campaign cash seldom seen in Ohio politics. It included $9.5 million in TV ads, largely from a dark-money group backing FirstEnergy, which supported salvaging its bankrupt spinoff FirstEnergy Solutions.

FirstEnergy Corp. Political Action Committee and the utility’s 15,000 employees, mainly through payroll deductions, have graced lawmakers and other political interests with $956,508 in contributions since 2017, with about 70% going to the ruling Republicans who dominate state government.

The numbers come from a Dispatch analysis and vetting of data largely compiled by the Energy and Policy Institute, a utility watchdog group that promotes clean, renewable energy, the use of which was downgraded in House Bill 6.

Throw in contributions from the PACs of three other Ohio utilities that are part of a consortium that owns two money-losing coal-fired power plants — which were subsidized by House Bill 6′s extension of a monthly consumer fee through 2030 — and the total of political largess rises to $1.65 million since 2017.

FirstEnergy officials refused to answer questions about the contributions, with a spokesman saying only that, “FirstEnergy Corp. makes and discloses all campaign contributions in accordance with applicable state and federal laws.”

With FirstEnergy backing a dozen of his preferred candidates with $153,000 in the 2018 primary to bolster his ultimate success in winning the House rostrum, Speaker Larry Householder, R-Glenford, led the charge in support of House Bill 6.There’s nothing wayward about it — the donations are legal and disclosed — but you can safely say FirstEnergy Corp. realized a good return on its investment in Ohio politicians.

The Akron-based utility and its employees gave nearly $1 million to legislators, other officeholders, candidates and political parties prior to winning narrow passage of the bill granting FirstEnergy Solutions around $1 billion over seven years to underwrite the pair of Lake Erie nuclear power plants it threatened to close.


“While it’s unfortunately typical for investor-owned utilities to spend money to influence politicians, the amount of money that FirstEnergy Solutions, AEP and allied dark-money groups spent to buy support from legislators for their coal and nuclear bailout has been astronomical,” said David Pomerantz, executive director of the Energy and Policy Institute.

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5 Responses to “Picking Losers: Ohio Energy Bill is a Dumpster Fire”


  1. […] via Picking Losers: Ohio Energy Bill is a Dumpster Fire | Climate Denial Crock of the Week […]

  2. rhymeswithgoalie Says:

    …FirstEnergy Corp. realized a good return on its investment in Ohio politicians.

    I’ll say. Maybe a few million to the pols (they can come cheap at the state level), and $9.5 million in CYA rationalization advertisement to get $150m back. Such a deal!


  3. An embarrassment for us Ohioans.

  4. Ben Fulton Says:

    I was looking for information on the Clifty Creek plant (the Indiana coal plant saved by this bill) and put together a list of national emission point sources which I thought might be useful. The information is available from the EPA but you have to dig for it.

    https://docs.google.com/spreadsheets/d/e/2PACX-1vQZFZuOG7yCSaXfbRsum5rRZpk28_f9hCm9Qv2sxoFnjT7bzmJxxnQsNXj4Sg4WYrdbUnE4wWWSzIgA/pubhtml


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