Hopes that state legislators in Ohio would avoid meddling in energy markets with a bailout for struggling nuclear power plants is fading fast. A vote is now planned for Tuesday, July 23rd in the House, which would be voting to approve a Senate version of the bailout legislation the House initially passed.
The now notorious House Bill 6 (HB 6) is a response to a long, ongoing push from FirstEnergy to get state (and federal) money to assist nuclear power plants it says are struggling and would have to close without an infusion of taxpayer dollars.
The bill does reduce renewable energy mandates and efficiency mandates to lower their cost to consumers. In fact, the better version of the bill would have done away with Ohio’s renewable energy mandates entirely. The current version of the bill promises to save ratepayers $140 million over six years even after the bailout charges. This trade is better than a bailout-only bill, but there are many problems with HB 6.
The headline cost is $150 million per year for nuclear plants alone, over 6 years that amounts to nearly $1 billion in taxpayer money being given away. That money will go out the door with few strings attached, and little oversight.
Plant owners have cited a need to purchase fuel to keep the plants going as a reason for urgency for the bailout. However, if the money they get from taxpayers exceeds fuel costs, they don’t have to give it back.
One report questions whether the plants need the money at all.
And the former chairman of the Public Utilities Commission testified to the Senate that: “there could be 50% fewer new natural gas plants built in Ohio if nuclear is subsidized, creating the opposite effect and raising costs by about $16 million a year instead.”
If energy costs went up as a result of the bailout, that would be a huge counterweight to provisions limiting renewable mandates and lowering costs.
Make no mistake, consumers and businesses will be paying costs directly for the bailout. Residential customers will pay 85-cents, and industrial/commercial businesses will pay $2,400 per month. Making matters worse, small commercial enterprises do not have bailout fees capped, and could be swamped with higher costs.
Hitting consumers and businesses with higher costs to directly pay for the bailout will drive up costs for products and services, and generally drive up the cost of living in the state.
Reforming renewable energy mandates would be great. But a Republican-dominated legislature should be able to do better than flawed policy like HB 6 which will impose guaranteed costs on Ohioans, and mess with a competitive energy market, leading to unintended negative consequences.
No wonder Senator Uecker slammed the bill, saying, “When you put lipstick on a pig, it’s nothing more than a pig.”