Bailout of nuclear plants right on schedule

Just one last General Assembly roll call, likely Aug. 1, is all that stands between Ohio electricity customers’ wallets and the cashbox of FirstEnergy Solutions’ Ohio nuclear power plants.

On Wednesday, the state Senate passed House Bill 6, the FirstEnergy Solutions nuclear subsidy plan. If the House finalizes HB 6 on Aug. 1, the monthly bills of Ohio’s electricity customers would, through 2027, include a customer charge to subsidize FirstEnergy Solutions’ Perry (Lake County) and Davis-Besse (Ottawa County) nuclear plants.

Miami Valley senators who voted “yes” on HB 6 were Republicans Bob Hackett, of London; Matt Huffman, of Lima; Peggy Lehner, of Kettering; Bob Peterson, of Washington Court House; Lou Terhar, of suburban Cincinnati; and Steve Wilson, of Maineville.

Ohio electricity customers’ bills would also, through 2030, include a subsidy for coal-fueled power plants owned by Ohio Valley Electric Corp. (Its owners include DP&L; Duke; FirstEnergy; and AEP.) One plant, Kyger Creek, is in Gallia County. The other, Clifty Creek, is in Madison, Ind. – an hourand-a-half west of Cincinnati.

Democratic-run New York, New Jersey, Connecticut and Illinois already require their states’ electricity customers to subsidize nuclear power plants.

Also in fairness, HB 6 could save Ohio’s electricity customers at least some money, according to the Legislative Service Commission, because HB 6 would reduce or eliminate some electric utility charges customers now pay for alternative energy, energy efficiency, etc.

Netting that out, LSC estimated that a DP&L residential customer would pay 69 cents a month less (or $8 less a year) for electricity beginning in 2021, then, beginning in 2027, $1.70 a month less ($20 less a year). Estimates for Duke residential customers are $2.51 a month less ($30 less a year), then $3.52 a month less ($42 less a year), and for FirstEnergy’s Ohio Edison customers, $1.68 a month less ($20 less a year), then $2.69 a month less ($32 less a year).

But those amounts don’t take this into account. Thanks to state law, and a 1957 ruling by the utility-friendly Ohio Supreme Court, Ohio utility customers don’t get refunds if a utility’s rates are later overturned: “Since 2009 ... Ohio consumers of electric utilities have been denied about $1.2 billion in PUCO-approved utility charges that the Supreme Court has found to be improper,” the Consumers’ Counsel’s board reported last week. That is, the utilities get to keep the money.

Then there’s this: Would residential customers’ bills go up, or down, in a completely competitive national electricity market, without Ohio’s nuclear subsidy? They’d likely go down.

Yes, leaving aside radioactive waste, nuclear plants don’t pollute. True also, shutting down Perry and Davis-Besse – inevitable, FirstEnergy Solutions says, unless HB 6 becomes law – would cost Lake and Ottawa counties jobs. But FirstEnergy Solutions’ shutdown threats imply the nuclear plants aren’t profitable. That’s not a given.

And there’s this: FirstEnergy Solutions is emerging from bankruptcy. If speculators bought FirstEnergy bonds, etc., at firesale prices, what happens to the value of those investments if the General Assembly makes Ohioans pump cash into FirstEnergy Solutions?