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Ohio Capitol Building.

As Ohio legislature regroups, power plant subsidy debate to continue

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.

Other pending electricity bills deal with renewable energy, energy efficiency, corporate separation of utilities and consumer protections. The outcome could shape Ohio’s electricity profile for decades to come.

“I anticipate that OVEC will be up first,” said House Majority Floor Leader Bill Seitz (R-Cincinnati), referring to House Bill 239. Seitz chaired the House Public Utilities Committee through its last hearings in June. Robert Cupp (R-Lima) was named to succeed him in July.

OVEC is the Ohio Valley Electric Corporation. Its shareholders include Dayton Power & Light and subsidiaries of FirstEnergy, American Electric Power and Duke Energy, along with utilities in several states bordering Ohio.

HB 239 and companion Senate Bill 155 would subsidize Ohio utilities’ costs for OVEC’s two coal plants — one in Ohio and Indiana. Although both plants date back to 1955, the utilities agreed in 2011 to keep OVEC going until 2040.

HB 239 and was introduced on May 23. Fast-track treatment led to a fourth hearing for the House bill by June 20.

Utilities previously asked regulators to guarantee cost recovery with charges for all utility customers by claiming they protect against rising costs. The current bill refers to a national security rationale from the 1950s. Consumer advocates, environmental groups and competitors oppose the bill.

“This is nothing more than another attempt by Ohio utilities to secure a financial bailout for their uncompetitive coal plants, one of which is not even in Ohio,” said Daniel Sawmiller at the Sierra Club. “It would force electricity customers to pay for these obsolete coal plants when cheaper and cleaner sources are available to meet their needs.”

Seitz said he supports HB 239 but does not agree that it is a “bailout.”

And nuclear

Similarly, Seitz took issue with a characterization of HB 178 as a “bailout” for FirstEnergy’s nuclear plants. That bill and companion SB l28 would make all of FirstEnergy’s utility customers guarantee costs for the Perry and Davis-Besse nuclear plants.

“Maybe Rep. Seitz likes the term ‘tax’ rather than ‘bailout’ to describe his support for legislation that would subsidize his favorite (if uneconomic) technologies, coal and nuclear,” countered Dick Munson at the Environmental Defense Fund. “But whatever he calls the bills, they still benefit giant utilities and burden Ohioans.”

Although Seitz indefinitely suspended hearings on HB 178 in May, he denied that HB 178 is “permanently stalled.”

FirstEnergy “is considering significant changes that, if made, would give [FirstEnergy] a new chance to move forward with a revised bill that shortens the number of years and caps the riders more in line with the current version of the OVEC bill,” Seitz said.

“This anti-competitive bailout attempt is not in line with Ohio’s regulatory structure and should not move forward,” Sawmiller said. “Even if revised for a shorter period of time with annual caps, this bill would have detrimental impacts to electricity customers’ bills.”

“Instead of asking Ohioans to pay for bad business decisions, we should be focusing on energy sources of the future, providing Ohio jobs and long-term sustainability for Ohioans,” added Miranda Leppla at the Ohio Environmental Council.

Clean energy

Under Seitz’s leadership, the House Public Utilities Committee had also fast-tracked House Bill 114. Introduced on March 7, that bill would make Ohio’s renewable energy standards voluntary and further weaken its energy efficiency standards. A 2014 law had already weakened the standards and then delayed any extra requirements until this year.

The House passed the bill on March 30. “I would like to see the Senate pass HB 114,” Seitz said.

“We believe the Senate will take a more deliberate approach, if it even comes back up at all,” said Aryeh Alex at the Ohio Environmental Council. “The Governor has been a champion of renewable energy standards, and has signaled that he will veto this bill, continuing to put Ohio on a path to be a leader in renewable energy.”

Gov. John Kasich vetoed a similar move late last year.

Ohio lawmakers may also revisit issues from two budget amendments that passed in the Senate but were rejected by the House. One would have allowed subsidies to support the credit ratings of utilities and their parents.

“A similar provision, I believe, is part of the as yet un-finalized bill that the utilities had earlier agreed to pursue this fall,” Seitz said.

Another budget amendment rejected by the House would have dialed back the property line setback for wind turbines to roughly 10 percent more than the 2014 level. Among other things, Seitz said the amendment “had no place in a budget bill.”

Seitz was the only proponent who spoke on the Senate floor in 2014 to support tripling of the previous property line setbacks. That change was made as a budget bill amendment.

Except for a few “grandfathered” sites, wind farm development in Ohio generally came to a halt after the current restrictions took effect. A bill to deal with the setbacks may be introduced in the Ohio Senate this fall.

And more…

A consumer protection bill could also shape Ohio’s electricity profile. HB 247 would specifically require refunds for any charges later found to have been “unreasonable, unlawful, imprudent, or otherwise improper.”

Introduced in May, HB 247 would also end “electric security plans.” Utilities have used those plans to add numerous charges to customer bills. Utilities’ earlier efforts to get subsidies for the OVEC plants and other generating plants were also part of electric security plan proposals.

HB 247 would also prevent utilities or their affiliates from owning electric generation plants. In other words, it would require full corporate separation, as opposed to spin-offs to other subsidiaries of the parent company.

The Office of the Ohio Consumer’s Counsel has previously come out in favor of HB 247, and Mark Romanchuk (R-Ontario) gave his sponsor testimony on June 20.

“It is way too early to tell” what the fate of the bill will be, Seitz said. “When we broke, I urged the bill’s proponents to spend their summer working with the utilities to find common ground between their proposals and the ones in the as yet un-finalized bill that the utilities intended to pursue this fall. However, I do not believe this has happened.”

4 thoughts on “As Ohio legislature regroups, power plant subsidy debate to continue

  1. Sietz is oblivious to his double talk in trying to bailout his buddies and kill clean energy.
    Cincinnati should be ashamed to send him as their rep…..

  2. How ridiculous of Seitz to say that the wind setback correction doesn’t belong in a budget bill. The original standards were altered in 2014 by wind haters like Seitz IN THE BUDGET BILL reconciliation. The original standards were set as part of SB 221 in 2008, and that is how legislation ought to be passed. With extensive hearings and bipartisan support. The 2014 changes were stuck in the budget reconciliation bill with no hearings, no prior notice, and no discussion whatsoever. Ohio’s setback provisions today are the most restrictive in the nation, and are costing Ohio several billion dollars worth of economic activity every year, now that Ohio wind is cheaper than new fossil or nuclear generation, and cheaper than some existing fossil and nuclear generation.

    Seitz has an irrational dislike of clean energy, and does not make a distinction between renewables, which he thinks are subsidized too much, and efficiency, which is not subsidized and which has saved Ohio citizens and businesses billions of dollars to date.

    Governor Kasich is much more aware of the real economic implications of all these bills than Senator Seitz is. Unfortunately, most of the Ohio Representatives and Senators in the Republican party do not think for themselves, and hear from Seitz before they hear from Kasich. In the mean time states neighboring to Ohio are reaping billions of dollars of economic growth which Ohio Republicans presumably think we can do without.

  3. It’s disgusting how non-polluting nuclear plants are lumped in with grossly polluting, 1950’s era coal plants. Also disgusting is the notion that anything at all (e.g., subsidies) should be done to actually keep those coal plants in operation. Given their horrendous impacts on public health and climate, govt. policy should actually try to hasten their closure. The fact that they are allowed to emit massive quantities of CO2 and other pollutants that harm public health, for free, already constitutes a massive market distortion in their favor. One that needs to be corrected (ideally, through CO2 and pollution taxes).

    Nuclear on the other hand deserves financial credit (subsidy) vs. fossil generation, to reflect its non-polluting, non-CO2-emitting nature, just like renewables do. The hypocrisy on display is amazing. Referring to nuclear supports as a “bailout” while supporting much larger per kW-gr subsidies, as well as outright mandates, for renewable energy.

    • It is nice to finally see an educated person speaking on this issue while people preach natural gas is the future. What happens if they crack down or ban fracking why would people rely on one source of energy or did people forget about the winter a few years ago that shutdown natural gas plants due to low temperatures where yet again Nuclear power was still operating 100% power. I guess people just assume that will never happen again or prices won’t go back up because we have never seen the supply of a fuel source shift right. Also, great point on wind and solar prices/subsidies very few people understand how much they are subsidized both at state and federal level. Also find it funny that Gov. Kasich said he can’t support the nuclear plants and that coal, nuclear, wind, solar, and natural gas should be in the energy mix. Then talks about a level playing field in a “competitive market” where renewables are mandated and natural gas right now is a all time low and EPA regulations on Coal. Where is the competitive market if I may ask because it doesn’t seem to support anything but natural gas in the short term?