Owners of two Ohio nuclear plants may decline subsidies
COLUMBUS, Ohio (AP) — The new owners of two Ohio nuclear power plants have given indications they are no longer interested in receiving as much as $1 billion in subsidies handed out in a tainted energy bill, according to two state lawmakers.
One of the lawmakers, freshman GOP Sen. Jerry Cirino, last week cosponsored Senate Bill 44, legislation that would eradicate subsidies that would have been paid by electric customers across the state for the plants now owned by a privately held company called Energy Harbor.
The plants, one of which is in Cirino’s district, were operated by a wholly owned subsidiary of Akron-based FirstEnergy Corp. when the bill known as HB6 was approved in July 2019 and quickly signed by Republican Gov. Mike DeWine.
Messages were left Friday with Energy Harbor spokespersons seeking comment about the company’s plans.
“I believe there is extremely broad support for Senate Bill 44 in the Legislature and broad external support as well,” said Cirino, who added that recent discussions with Energy Harbor officials lead him to believe they will not find any problems with SB44.
Rep. Bill Seitz, a Cincinnati Republican who was a key player in pushing HB6 through the Legislature, said an Energy Harbor lobbyist told him in December that the company would like the option to decline the subsidies.
Both Seitz and Cirino said Energy Harbor officials were concerned that accepting subsidies would put the company at a disadvantage competing with non-subsidized suppliers, given priority on pricing in the 13-state PJM energy markets where electricity is bought and sold.
“You don’t have to be a genius to come up with some logical reasons for this,” Seitz said.
Seitz also said early actions by the new administration of Democratic President Joe Biden taking aim at other energy sectors, such as rescinding a permit for construction of the Keystone XL Pipeline project, may have caught Energy Harbor’s attention because they could foster renewed interest in nuclear power.
Cirino signed on as a co-sponsor of SB44 after years of unflagging support to keep the Perry plant in Lake County and the Davis-Besse plant in Ottawa County open. He served four years as a Lake County commissioner before being elected to the Senate in November.
“This is part of an overall resolution, a win-win for everybody,” Cirino said during an interview Friday. “We have every reason to believe the plants will remain viable and continue to employ people and pay taxes communities have relied on.”
HB6 critics have questioned whether Energy Harbor needs financial help to keep the plants operating after buying back $800 million of company shares last year. Energy Harbor officially took ownership of the plants in February 2020 in a deal struck with a FirstEnergy subsidiary in U.S. Bankruptcy Court.
“It’s quite a turnaround if Energy Harbor is now telling the legislature to repeal its billion-dollar corporate welfare subsidy from Ohioans,” said Ohio Consumers’ Counsel Bruce Weston in a statement. “Questions that come to mind include: Did the two nuclear plants really need the subsidy that they got from Ohioans’ state government? And were the nuclear plants really going to be closed without the subsidy?”
Former PUCO Chair Todd Snitchler, now president and CEO of the Washington-based Electric Supply Association, on Friday called HB6 a “shameful piece of legislation.”
“Ohioans don’t need to pay more only to support struggling plants,” Snitchler said in a statement. “Competitive power markets are delivering reliable power and billions in cost savings to electric customers while significantly reducing emissions and enabling new clean energy build — without subsidies and extra ratepayer charges.”
Cirino’s bill, co-sponsored with Sen. Michael Rulli, a Salem Republican, would leave in place an HB6 subsidy that could provide a total of $20 million a year for large-scale solar projects. None of the five solar farms that qualified for the subsidy when HB6 was passed and quickly signed by Republican Gov. Mike DeWine are yet operational.
The Ohio Supreme Court in late December issued a temporary stay to stop collection of subsidies for the nuclear plants and the solar installations starting in January. The court’s ruling was made in response to a lawsuit filed by Ohio Attorney General Dave Yost’s office to prevent electric customers from across the state from having to pay for the subsidies.
Yost last week announced that his office had reached an agreement with FirstEnergy to forgo collecting revenues from its customers, another of the HB6 subsidies that has roiled critics. The provision would have guaranteed that FirstEnergy’s profits would match those from 2018, a year of weather extremes in its northern Ohio service areas.
HB6 has been under intense scrutiny since U.S. Attorney David DeVillers announced on July 21 that then-House Speaker Larry Householder and four others had been arrested for their involvement in a $60 million bribery scheme secretly funded by an unidentified company that clearly was FirstEnergy. Authorities have described it as the biggest bribery scheme in state history.
The five men and a dark money group were subsequently indicted on federal racketeering charges. Householder has pleaded not guilty and awaits trial. Two political operatives have pleaded guilty to charges. The dark money group called Generation Now filed a plea agreement on Friday.
Republicans who control both legislative chambers have not been able to reach a consensus so far on repealing or replacing the measure.
Sponsor testimony on the new bill eliminating the nuclear subsidies begins Tuesday.