Nuclear plant owner presses for subsidy
Chances are dwindling that FirstEnergy will get quick approval of a nuclear-plant subsidy from Ohio lawmakers, a financial boost that the utility says would help avoid a bankruptcy filing by its power-plant subsidiary.
Legislative leaders say no more hearings are scheduled on the proposal, and the General Assembly is just a few weeks from a summer break.
Chuck Jones, FirstEnergy’s CEO, made a plea for action on the subsidy before a Senate panel Thursday.
“Ohio cannot afford to continue heading down a path that could lead to less fueldiverse and fewer homegrown energy resources, more energy imports, fewer jobs and less economic growth, not to mention more volatile electricity prices for our customers and your constituents,” he said.
FirstEnergy owns the state’s only two nuclear plants: Davis-Besse near Toledo, and Perry east of Cleveland. The plants might be forced to close because their operating costs often exceed the market price of electricity.
The company has said that Senate Bill 128, which would increase customer bills by about 5 percent, is needed to help avoid a bankruptcy filing by FirstEnergy Solutions, the FirstEnergy subsidiary that owns its Ohio power plants.
In central Ohio, Akron-based FirstEnergy is the electricity utility for most of Madison County and small parts of Delaware, Franklin, Morrow and Union counties. Most central Ohio residents are served by another large utility, Columbusbased American Electric Power.
Jones has spent time
lately talking about a potential bankruptcy filing by FirstEnergy Solutions. He said in a conference call last month that the company is looking at how a bankruptcy might affect the parent company, but he did not provide specifics other than to say the issue is complicated.
House and Senate versions of the bill are being considered. Several hearings have taken place in the House, and the Senate version had Thursday’s hearing. Although legislative leaders say the proposal still has a chance of passing, its progress appears to have stalled.
“Due to the extensive attention already given to the issue, (a pause in hearings) will give members some
additional time to digest the information they have been presented, and it will be something the caucus continues to discuss and analyze,” said Brad Miller, spokesman for the House Republican majority.
Sen. Bill Beagle, R-Tipp City, chairman of the Senate Public Utilities Committee, said he is sensitive to the nuclear plants’ economic importance to their communities and also is looking at the effects on electricity bills.
“I’m trying to give it careful consideration, and certainly, the issue is a complicated one,” he said. “The jury is still out.”
He held out the possibility of additional hearings in June.
Anthony Crowdell, an analyst for Jefferies, said in a research note that he thinks the bill has less than a 30 percent chance of becoming law, given tepid support in the House and Senate and indications that Gov. John Kasich might oppose the idea.
Despite the obstacles, FirstEnergy says it will continue to make its case.
“We think this is important, and keeping the nuclear plants is good for Ohio,” spokeswoman Jennifer Young said soon after Jones’ testimony. “We hope to see a vote on this sometime this summer.”