‘ZEN’ would burden consumers, taxpayers
Once its summer recess is over, the Ohio legislature likely will consider a bill to prop up Ohio’s nuclear power plants. But the bill’s zero-emission nuclear provision, cleverly dubbed “ZEN,” is cause for distress. It would cost billions, undermine market competition and raise energy prices for taxpayers and families across the state.
The ZEN program would throw a financial lifeline to two struggling Ohio nuclear plants — Davis-Besse, near Toledo and the other in Perry, just east of Cleveland. The plants have been facing stiff competition from lessexpensive forms of energy, especially natural gas.
Who funds this lifeline? Taxpayers, of course. The proposed subsidy would allow the plants’ owner, FirstEnergy, to collect billions of additional dollars from ratepayers, whose electric bills would jump 5 percent per year, and probably more. And, all federal and state buildings will see electric-rate increases, which means that taxpayers will foot that additional cost.
The bill’s authors claim the bailout will help Ohio keep its “diverse” energy sector. But the evidence is clear: allowing different forms of energy to compete in a free marketplace has helped keep electricity costs down across Ohio. In fact, thanks in large part to an increase in natural gas, electricity prices have decreased by 50 percent throughout the state.
It’s concerning, then, that the state government is considering giving FirstEnergy a financial edge. Natural-gas plants being built in Lordstown and Oregon, Ohio, for instance, won’t be receiving any government subsidies.
If Ohio’s taxpayers and ratepayers are forced to financially favor one form of energy over others, the competition keeping energy costs down will be upended. On top of all this, the bill poses serious ethics issues. One of the bill’s original cosponsors, Sen. John Eklund, R-Chardon, happens to practice law at a firm whose clients include FirstEnergy. Additionally, critics of the bill point out that the ZEN program might well run afoul of federal jurisdiction over energy markets.
No wonder a wide array of organizations, ranging from the Ohio Manufacturers Association to the Sierra Club, oppose the bailout.
As the Ohio Manufacturers Association puts it, “FirstEnergy should not be allowed to prop up its business on the backs of Ohio consumers. While manufacturers support nuclear power as part of an all-of-the-above energy portfolio, Senate Bill 128 is wolf in sheep’s clothing.”
Unfortunately, the clamor for nuclear plant bailouts isn’t just an Ohio issue. Last summer, New York approved a $7.6 billion bailout of its decrepit nuclear plants. In December, Illinois passed legislation throwing the state’s struggling nuclear plants billions of dollars in subsidies. Meanwhile, New Jersey and Connecticut are contemplating similar arrangements.
This is a trend the nation should quickly kill — and Ohio should take the lead.
Subsidizing failing industries that can’t turn a profit in the marketplace is bad news for taxpayers and ratepayers. Better to leave a level playing field where all forms of energy can compete. That, not bailouts, will ultimately benefit Buckeyes.
David Williams President Taxpayers Protection Alliance Washington, D.C.
William McCormick Westerville Worthington