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Christina Polesovsky and Erica Bowman Press Call on Ohio Nuclear Bailouts

Press call statement

API Ohio Associate Director Christina Polesovsky
API Chief Economist Erica Bowman

New Ohio poll on bailouts for nuclear power companies

June 7, 2017

As prepared for delivery

Christina Polesovsky

Good Morning and thank you for joining today’s call. My name is Christina Polesovsky and I am the associate director of API Ohio.

Tomorrow morning, the Ohio Senate Public Utilities Committee is set to hear testimony on Senate Bill 128 that would provide a bailout to the nuclear energy industry at the expense of Ohioans. As the committee considers this ill-conceived legislation, we’d like to share some insight and concerns from Ohio voters about what this means to them.

In a recent poll, voters across the state spoke loud and clear: 79 percent said they were opposed to a legislative proposal allowing FirstEnergy to charge its customers a special fee to increase funding for uneconomical nuclear plants.

And a majority of voters opposed the bill regardless of party affiliation: Democrats 81 percent, Republicans 79 percent, and Independents 77 percent.

What’s more, the majority of voters across the state believe electricity prices will be lower with competition, NOT intervention by the government.

And they’re right. According to reports, the average American household saved as much as $1337 due to lower utility costs and other energy-related savings from the shale gas revolution in 2015. Also, AAA reports that American drivers saved as much as $550 in transportation fuel costs thanks to the U.S. energy renaissance. Lower energy prices are also driving manufacturing back to states like Ohio.

And that’s not all. Ohio’s oil and natural gas industry supports 255,000 Ohio jobs and the industry’s employees earn salaries almost double the state’s average.

But it doesn’t end there. In addition to its economic benefits, natural gas has allowed communities across the state to experience cleaner air. In fact, Southwest Ohio is in attainment of air quality standards for the first time in a decade

Picking winners and losers in the energy markets by subsidizing nuclear power companies while consumers foot the bill sets a dangerous precedent and would deny Ohio consumers, workers and environment the benefits of affordable and reliable natural gas.

Moving forward, the legislature should follow the will of the voter and reject this misguided legislation that could raises costs for consumers while providing no incremental benefit to the environment.

With that, I will turn it over to Erica Bowman, API’s chief economist, who can offer more insight into Ohio Senate Bill 128.

Erica Bowman

Good Morning,

As Christina mentioned, my name is Erica Bowman and I am the chief economist here at the American Petroleum Institute.

In 2016 affordable, reliable natural gas provided 25 percent of the in-state electricity generation increasing its contribution more than ten-fold since 2005.  According to EIA data, this affordable, natural gas generation has also enabled a 25 percent carbon emission reduction from Ohio’s electric generation sources. Additionally, Ohio’s production of natural gas exceeded 4 billion cubic feet per day in 2016 – enough to power more than 21 million homes - supporting an estimated 89 thousand direct and indirect jobs in Ohio.

Ohio Senate Bill 128 is a bad deal for Ohio consumers. It would provide a $300 million annual bailout to FirstEnergy at the expense of Ohio consumers for 16 years at a total potential cost of over $5 billion. According to FirstEnergy, the Davis-Besse and Perry nuclear power plants employ 1,420 Ohioans. That’s a cost of more than $200,000 per employee subsidized by ratepayers. This bailout would be in addition to more than $200 million in rate increases per year that the public utilities commission last year allowed FirstEnergy to levy on Ohioans.

We appreciate actions in the Ohio House to sideline this misguided legislation and urge members of both chambers to reject this legislation once and for all so that Ohio consumers can fully realize the benefits of our state’s abundant supplies of affordable, clean-burning natural gas.

With that, we will take your questions.