Nuclear Gets Its Bailout, Ohio Ratepayers Get the Bill

Mark Green
Posted July 25, 2019

With Ohio’s passage of a corporate bailout for nuclear and coal-burning power plants – a consumer-funded subsidy that could amount to more than $1 billion through 2027 – Columbus Dispatch metro columnist Ted Decker lamented: Why are ratepayers paying the price for one company’s ineptitude?

A great question that apparently didn’t register with a majority in the state legislature or Gov. Mike DeWine. Then again, they weren’t persuaded to back off the subsidy plan when confronted by Ohio public opinion, which overwhelmingly opposed docking the state’s ratepayers on a monthly basis to bail out two nuclear power plants.

The new law provides $150 million a year in subsidies to two FirstEnergy Solutions (FES) nuclear plants. It also authorizes a monthly surcharge on retail electric customers’ bills to prop up two coal-fired plants – including one in next-door Indiana. Hand it to FES; the company was undeterred last year when the Federal Energy Regulatory Commission rejected a similar national subsidy program for nuclear and coal plants. FES simply shifted its focus to Columbus and, apparently, a more malleable audience.

API Ohio Executive Director Chris Zeigler:

“API is disappointed in the legislature for passing this corporate bailout for nuclear and coal-burning power plants, putting the financial burden on Ohio taxpayers and disadvantaging other electricity generation sources, particularly affordable natural gas – which has delivered both savings and cleaner air to Ohioans over the last decade.”

Zeigler warned that tilting the playing field in favor of nuclear and coal would have negative impacts in the year to come, citing LS Power’s announcement that it would halt development of a $500 million expansion of its natural gas power plant in Luckey, Ohio, because of the subsidy legislation:

“There’s no telling how much additional investment our state will now miss out on because lawmakers decided to cater to corporations over constituents.”

Here’s what we do know: Ohio’s decision to dole out subsidies from the pockets of consumers can only serve to invite the beneficiary industries to line up elsewhere. Why not? Ohio lawmakers bought the argument that they should stage a market intervention, favoring some forms of energy. Maybe others will as well. Ohio’s decision is anti-consumer and anti-markets.

Meanwhile, columnist Decker’s question remains: Why should ratepayers foot the bill for a company that was struggling to compete in the marketplace? Decker:

Proponents of the new state law swear it will end up saving ratepayers money. We’ll see about that. That is, if we can afford to keep the lights on to read the bill.