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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.”
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.
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.
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.”