As the Ohio legislative session resumes next month, subsidies for nuclear generation and 1950s-era coal plants are expected to once again be on the table.
Most of Ohio will pay less to make sure adequate electric capacity is available three years from now. But critics say that changes in the grid operator’s auction rules discriminate against certain types of clean energy and will lead to overpayments.
A bill to subsidize FirstEnergy’s Davis-Besse and Perry nuclear plants presents potential conflicts under Ohio and federal law.
The growing debate over nuclear power’s role in curbing emissions is running headlong into an ongoing controversy over “bailouts” for Ohio’s largest utility.
Threats to close nuclear plants in Illinois and New York triggered hundreds of millions of dollars in annual subsidies to keep the plants open in a last-gasp reprieve to save the jobs, taxes and carbon-free energy they produce.
Less than 24 hours after Illinois Gov. Bruce Rauner signed off on a plan to subsidize two nuclear plants for billions of dollars over the next 10 years, energy companies in Michigan announced plans to close one of the state’s three plants as a way to protect ratepayers. Entergy’s decision to close the Palisades plant in 2018 — by cutting short a power-purchase agreement with Consumers Energy that was to expire in 2022 — is a strong contrast to the protracted debate in Illinois over whether to subsidize unprofitable nuclear plants there. Unlike in Illinois, Entergy and Consumers officials have no plans to push for such a ratepayer subsidy in Michigan. They say closing Palisades, which has faced multiple safety violations over the past several years, is the more financially prudent option. “We do not believe there would be support in Michigan for legislation that would subsidize nuclear and have no plans to push for that,” said Entergy spokesperson Patricia Kakridas.
The operator of one of Michigan’s nuclear plants will shut it down earlier than expected after reaching an agreement with Consumers Energy to cut its power purchase agreement short.
New Illinois energy legislation was a product of negotiation and compromise, but many details still have to be worked out.
Michigan’s three nuclear plants appear to be on solid financial footing at least through 2021 — a notable contrast from other states where nuclear power has struggled to compete with low natural gas prices.
Illinois’ sweeping energy bill may become law this week after an amended version was passed by a state House energy committee Tuesday.