Ohio lawmakers pass bill to cut renewable requirement, help nuclear and coal

This week, lawmakers in Ohio's House of Representatives voted 53-43 in favor of a controversial bill that would permit a consumer-funded subsidy for nuclear plants and possibly for ailing coal plants as well.

The bill would also end Ohio's renewable portfolio standard, which required that the state's utilities to obtain 12.5 percent of their power from renewable sources by 2027. Instead, that renewable portfolio standard is replaced by smaller steps to bolster renewable power, but environmental groups say the bill is a step in the wrong direction.

A version of House Bill 6 has now been introduced to the state's Senate. If it passes there, it will likely become law due to the Governor's support of the bill.

A boon for FirstEnergy Solutions

Currently, Ohioans pay a $4.39 surcharge on their electricity bills to fund Ohio's renewable portfolio standard, according to local news site Cleveland.com. House Bill 6 would eliminate that surcharge and replace it with a $1 surcharge to raise more than $170 million per year, which would be given to Ohio energy company FirstEnergy Solutions to keep its Davis-Besse and Perry nuclear plants open. The subsidies would be retired in 2026.

First Energy Solutions owns nuclear and coal plants throughout Ohio and Indiana. In April 2018, its coal business filed for Chapter 11 bankruptcy protection. The company then asked the Trump Administration to grant it an emergency bailout using Section 202(c) of the Federal Power Act, which allows the federal government to keep the electrical grid operating during emergencies. Thus far, the Administration has not invoked that Act.

House Bill 6 also has some good news for the Ohio Valley Electric Corporation, which will be allowed to petition public utility regulators for an additional fee of $2.50 per month per customer to keep two of its coal plants in Ohio and Indiana open.

Another, smaller provision in the bill would allow residents of unincorporated areas of Ohio to hold a referendum on whether to allow wind projects to proceed.

Building support among Democrats

Though the above elements were in the original bill, which is supported by the state's Republican Governor, the bill was amended early Wednesday to garner support from Ohio's House Democrats.

Among the concessions: six large-scale solar projects that already exist in Ohio would be eligible to access some of the nuclear subsidy fund. Limits were also placed on how much FirstEnergy could devalue its nuclear properties (a tactic the company could use to reduce its tax liability).

Ultimately, those concessions got enough Democrats onboard to pass the bill (especially those with nuclear plants in their district). The vote wasn't strictly partisan, though. Cleveland.com notes that one Republican congressman objected to the lack of a third-party audit of FirstEnergy Solutions' finances to make sure the company actually needs the subsidy, which oil and gas interests dispute. (Oil and gas interests likely stand to lose the most from House Bill 6, since natural gas is the first fuel utilities often turn to when a coal or nuclear plant shuts down.)

Environmentalists largely oppose the bill. The Union of Concerned Scientists (UCS), which recently reversed its opposition to nuclear power, wrote in a blog post this week that the bill was a step in the wrong direction. While lawmakers say the bill will save consumers money, UCS disputes that statement. "While the charges appearing on consumer bills might be less, this ignores the much greater energy bill savings consumers have been realizing through investments in energy efficiency," UCS writes. "In addition, the cost of wind and solar has fallen by more than 70 percent over the past decade, making them more affordable for consumers and competitive with natural gas power plants in many parts of the country."