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Released July 25, 2019 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--In a surprise move that follows decisions by other states to financially support nuclear power plants, the Ohio House of Representatives has approved changes to a Ohio Senate-approved bill that provided subsidies to two in-state nuclear power plants, two coal-fired plants and six Ohio solar farms. Republican Governor Mike DeWine then signed the bill into law.
The Ohio House on Tuesday voted 51-38 to support changes to House Bill 6, a bill that originated in the state House but was modified July 17 by the state Senate. The new law provides up to $150 million per year over the 2021-2027 timeframe to FirstEnergy Solutions (FES) (Akron, Ohio), the bankrupt owner of the Perry and Davis-Besse nuclear power plants. FES is a subsidiary of FirstEnergy Corporation (NYSE:FE) (Akron, Ohio).
Davis-Besse, located in northwest Ohio, is a one-unit plant with 908 megawatts (MW) of generating capacity. It began operating in 1977. The Perry plant, which began generating electricity in 1987, is a one-unit, 1,268-MW facility in northeast Ohio.
In addition to providing FES up to $1.05 billion in subsidies over seven years, the new law also provides $50 million a year through 2030 in financial support to two coal-fired power plants owned by the Ohio Valley Electric Corporation (OVEC) (Piketon, Ohio). One OVEC plant is in Ohio and the other is in Indiana. An additional $20 million per year in subsidies will go to six solar plants in Ohio. The new law also relaxed state mandates on renewable energy and energy efficiency. For more on the Ohio Senate's passage last week of H.B. 6, see July 23, 2019, article - Ohio Senate Passes Nuclear Bailout Bill, House Action Expected Next Month.
The move by the Ohio House came as a surprise because that chamber had adjourned last week before it could consider changes to H.B. 6 that has been passed by the Ohio Senate. House officials told reporters the Senate-approved bill would be considered when the House was back in session in August.
FirstEnergy and FES have for years sought financial support for the Perry and Davis-Besse nuclear plants, which the companies alleged were unprofitable. For more on those companies' multi-year effort to secure legislation, see: June 11, 2019, article - State-level Nuclear Subsidies: Yes, No and Maybe; April 6, 2018, article - Investors Yawn after FirstEnergy Unit Files Chapter 11, Plans to Close Four Nuclear Units; October 4, 2017, article - Electricity Scrum Set to Resume in Ohio Legislature; May 30, 2017, article - Down but Not Out? FirstEnergy Still Seeking $300 Million Per Year in Nuclear Support; and March 30, 2017, article - Will FirstEnergy Achieve ZEN for its Ohio Nuclear Plants?.
Ohio Governor DeWine's Tuesday signing of the bill was criticized by organizations that had opposed the measure, including the state's natural gas industry, and praised by those that had supported it, such as nuclear power interests. The one-sentence statement from DeWine's press office said: "Ohio Governor Mike DeWine has signed House Bill 6, the energy bill passed by the Ohio Senate and Ohio House of Representatives."
The new law "echoes support we've seen in New Jersey, New York, Illinois and Connecticut and reaffirms the major role nuclear carbon free energy has in lowering carbon emissions," Maria Korsnick, president and chief executive of the Nuclear Energy Institute (Washington, D.C.), said in a statement. She added that Perry and Davis-Besse provide about 90% of the state's carbon-free electricity.
But the Nature Conservancy blasted the new law: "HB 6 is a step back from what we have currently in statute for the clean energy standards. This is not a comprehensive energy bill. Instead, this bill compromises successful policies that have supported renewable energy and energy efficiency to provide a legislative vehicle for a nuclear and coal bailout," the group said in a statement.
An environmental group said it would pursue all options, potentially including a voter referendum, to overturn the law.
In questioning the need for the law, critics pointed out that FES had not provided financial information on its costs and revenues. A rider was attached to the bill reportedly requiring FES to undergo a state financial review before it could receive subsidies.
In a recent public opinion poll, 70% of Ohioans were opposed to the bill. Interestingly, that poll said that more Republicans opposed the bill than Democrats.
That poll, conducted by API Ohio, also found that 88% of respondents also believed that FES should be subject to review of its financial records by the state Legislature before another vote on the bill.
Aside from the subsidies, the new law allows utilities to end energy-efficiency programs once they demonstrated cumulative electricity usage reductions of 17.5%, a level most reportedly are close to achieving. The law allows utilities to count "banked" savings from earlier years. The new law also reduced Ohio's renewable-energy goals: utilities now must get 8.5% of their electricity from renewable resources by 2026. Previously, utilities were required to get 12.5% of their power from renewable resources by 2027.
Mark Durbin, a spokesman for parent company FirstEnergy, told Industrial Info, "While FirstEnergy no longer has a financial stake in electric generation in Ohio, we are a stakeholder in the state's economic success, the security and resiliency of the regional electric grid and the potential impact of uncertain electric markets on our customers' electric bills. We support House Bill 6 because it helps preserve the employment, economic, and environmental benefits of Ohio's nuclear plants, and supports other clean energy resources for our Ohio customers and communities we serve."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The Ohio House on Tuesday voted 51-38 to support changes to House Bill 6, a bill that originated in the state House but was modified July 17 by the state Senate. The new law provides up to $150 million per year over the 2021-2027 timeframe to FirstEnergy Solutions (FES) (Akron, Ohio), the bankrupt owner of the Perry and Davis-Besse nuclear power plants. FES is a subsidiary of FirstEnergy Corporation (NYSE:FE) (Akron, Ohio).
Davis-Besse, located in northwest Ohio, is a one-unit plant with 908 megawatts (MW) of generating capacity. It began operating in 1977. The Perry plant, which began generating electricity in 1987, is a one-unit, 1,268-MW facility in northeast Ohio.
In addition to providing FES up to $1.05 billion in subsidies over seven years, the new law also provides $50 million a year through 2030 in financial support to two coal-fired power plants owned by the Ohio Valley Electric Corporation (OVEC) (Piketon, Ohio). One OVEC plant is in Ohio and the other is in Indiana. An additional $20 million per year in subsidies will go to six solar plants in Ohio. The new law also relaxed state mandates on renewable energy and energy efficiency. For more on the Ohio Senate's passage last week of H.B. 6, see July 23, 2019, article - Ohio Senate Passes Nuclear Bailout Bill, House Action Expected Next Month.
The move by the Ohio House came as a surprise because that chamber had adjourned last week before it could consider changes to H.B. 6 that has been passed by the Ohio Senate. House officials told reporters the Senate-approved bill would be considered when the House was back in session in August.
FirstEnergy and FES have for years sought financial support for the Perry and Davis-Besse nuclear plants, which the companies alleged were unprofitable. For more on those companies' multi-year effort to secure legislation, see: June 11, 2019, article - State-level Nuclear Subsidies: Yes, No and Maybe; April 6, 2018, article - Investors Yawn after FirstEnergy Unit Files Chapter 11, Plans to Close Four Nuclear Units; October 4, 2017, article - Electricity Scrum Set to Resume in Ohio Legislature; May 30, 2017, article - Down but Not Out? FirstEnergy Still Seeking $300 Million Per Year in Nuclear Support; and March 30, 2017, article - Will FirstEnergy Achieve ZEN for its Ohio Nuclear Plants?.
Ohio Governor DeWine's Tuesday signing of the bill was criticized by organizations that had opposed the measure, including the state's natural gas industry, and praised by those that had supported it, such as nuclear power interests. The one-sentence statement from DeWine's press office said: "Ohio Governor Mike DeWine has signed House Bill 6, the energy bill passed by the Ohio Senate and Ohio House of Representatives."
The new law "echoes support we've seen in New Jersey, New York, Illinois and Connecticut and reaffirms the major role nuclear carbon free energy has in lowering carbon emissions," Maria Korsnick, president and chief executive of the Nuclear Energy Institute (Washington, D.C.), said in a statement. She added that Perry and Davis-Besse provide about 90% of the state's carbon-free electricity.
But the Nature Conservancy blasted the new law: "HB 6 is a step back from what we have currently in statute for the clean energy standards. This is not a comprehensive energy bill. Instead, this bill compromises successful policies that have supported renewable energy and energy efficiency to provide a legislative vehicle for a nuclear and coal bailout," the group said in a statement.
An environmental group said it would pursue all options, potentially including a voter referendum, to overturn the law.
In questioning the need for the law, critics pointed out that FES had not provided financial information on its costs and revenues. A rider was attached to the bill reportedly requiring FES to undergo a state financial review before it could receive subsidies.
In a recent public opinion poll, 70% of Ohioans were opposed to the bill. Interestingly, that poll said that more Republicans opposed the bill than Democrats.
That poll, conducted by API Ohio, also found that 88% of respondents also believed that FES should be subject to review of its financial records by the state Legislature before another vote on the bill.
Aside from the subsidies, the new law allows utilities to end energy-efficiency programs once they demonstrated cumulative electricity usage reductions of 17.5%, a level most reportedly are close to achieving. The law allows utilities to count "banked" savings from earlier years. The new law also reduced Ohio's renewable-energy goals: utilities now must get 8.5% of their electricity from renewable resources by 2026. Previously, utilities were required to get 12.5% of their power from renewable resources by 2027.
Mark Durbin, a spokesman for parent company FirstEnergy, told Industrial Info, "While FirstEnergy no longer has a financial stake in electric generation in Ohio, we are a stakeholder in the state's economic success, the security and resiliency of the regional electric grid and the potential impact of uncertain electric markets on our customers' electric bills. We support House Bill 6 because it helps preserve the employment, economic, and environmental benefits of Ohio's nuclear plants, and supports other clean energy resources for our Ohio customers and communities we serve."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
