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Ohio nuclear subsidy bill now includes repeal of renewables mandate

An Ohio legislative panel advanced to the state House of Representatives a modified plan to shore up the economics of two nuclear power plants.

The Ohio House Energy and Natural Resources Committee voted 8-5 along party lines May 23 to send a new version of House Bill 6 to the floor. Along with helping the nuclear plants, the bill now allows for customer-funded payments to two coal-fired power plants operated by Ohio Valley Electric Corp. and repeals Ohio's renewable energy and energy efficiency standards, changes that prompted an outcry from House Democrats and environmental advocates.

State Reps. Jamie Callender and Shane Wilkin, both Republicans, introduced the bill in April. It establishes the Ohio clean air program and a ratepayer-backed fund for qualifying resources.

The bulk of the funding would likely go to the 908-MW Davis-Besse and 1,268-MW Perry nuclear plants, which bankrupt power provider FirstEnergy Solutions Corp. has slated for closure absent financial support.

The bill establishes credits for certified clean air resources set at $9 per MWh.

Under the bill, Ohio's electric distribution utilities would collect a monthly charge from retail electric customers. The state treasurer would deposit the money into the Ohio clean air program fund.

Starting Jan. 1, 2020, residential customers would be charged 50 cents per month, a fee that increases to $1 per month starting in 2021 through 2026. Commercial customers would pay a monthly fee of $10 in 2020 and $15 from 2021 through 2026. Industrial customers would pay $250 per month for the duration of the program. Commercial or industrial customers that exceeded 45 million kWh of electricity at a single location in the preceding year would be subject to a $2,500 monthly charge.

The bill would also include in state law a ruling from the Ohio Supreme Court allowing for the coal plant charge, according to a report from The fees, set at $2.50 per month for residential customers and capped at $2,500 per month for other customer classes, would go to the Kyger Creek plant in Ohio and Clifty Creek plant in Indiana. Ohio-based utility subsidiaries of AES Corp., American Electric Power Co. Inc., Duke Energy Corp. and FirstEnergy Corp., along with generation and transmission cooperative Buckeye Power Inc., own interests in the two plants.

Committee Chairman Nino Vitale, R-Urbana, said that despite the surcharges for the nuclear and coal plants, consumers' rates would decline because the bill would cancel out other, larger surcharges related to the renewable energy and energy efficiency programs, according to a report in the Columbus (Ohio) Dispatch.

FirstEnergy Solutions said in an emailed statement that the bill provides an effective legislative solution to keep its nuclear plants open for many years to come while preserving thousands of jobs and an important revenue source for Ohio. The company has said it will shut Davis-Besse in 2020 and Perry the following year.

"We also believe the amendments, which still protect 90% of Ohio's zero-emissions electricity, strengthens the bill and continue to support the legislation," the company said.

Bill opponents said lawmakers made a bad idea even worse.

"H.B. 6 is a total flip-flop that started by calling itself a clean air bill and evolved to be a corporate welfare bill that bails out a failing Indiana coal plant," Assistant Minority Leader Kristin Boggs, D-Columbus, said in a statement.

Boggs and other House Democrats said May 23 that their "Clean Energy Jobs Act" is a better path forward for Ohio. A bill is not yet available, and lawmakers did not offer details of their plan in a news release. The report said the Democrats' proposal would "require Ohio utilities to get half their energy from renewable sources by 2050, expand the state's energy-efficiency mandates, and establish accountability and transparency measures for the nuclear subsidies in H.B. 6."

Ohio's renewable portfolio standard requires utilities to derive 12.5% of their retail electric supplies from solar, wind, biomass, geothermal and other qualifying alternative energy resources by 2027, with 0.5% carved out specifically for solar. The efficiency requirement calls for annual reductions leading to cumulative electricity savings of 22% by 2027.

Neil Waggoner, a campaign representative for the Sierra Club's Beyond Coal campaign in Ohio, said H.B. 6 now combines ideas that lawmakers have considered before.

"These issues have been around for a bit and people have been paying attention to them, but it just seemed a bit of a surprise that they would add something even more toxic to what's already an incredibly toxic bill," Waggoner said.