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The draft legislation would create a new surcharge, with proceeds distributed to power plants that “make a significant contribution toward minimizing emissions.”
Legislation to subsidize two FirstEnergy Solutions nuclear power plants in Ohio is about to surface in the Ohio House.
Republican majority leaders have been circulating a proposal that would add up to $300 million annually to electric bills across the state, creating a state “clean air program” with grants administered by political appointees.
About $180 million would be earmarked for the FirstEnergy Solutions nuclear power plants, say analysts who have looked at the legislation. The remaining $120 million could be used to prop up other companies — though it appears those companies would not be owners of wind and solar farms.
The draft legislation, obtained by the Energy News Network, would add a $2.50 per month surcharge to every residential customer’s bill, a $20 per month surcharge to every commercial customer’s bill and a $250 monthly charge to every industrial customer’s bill.
The legislation would also eliminate existing surcharges that commercial and residential customers pay to support energy efficiency and peak reduction programs created by the utilities. Industrial customers can already opt out of these programs.
Customers who want to continue supporting the efficiency programs — on top of the new “clean air” charges — would have to notify the Public Utilities Commission of Ohio in writing.
The statewide aspect of the new proposal is a new twist to create a nuclear subsidy. Two previous legislative bailout efforts limited a nuclear surcharge to Ohio customers in FirstEnergy territory.
The draft legislation, now in its fifth revision according to its title page, doesn’t actually mention the word “nuclear” in its language.
Instead the bill would create the Ohio Clean Air Program, echoing the carbon-free argument that FirstEnergy Solutions lobbyists have been using to describe their nuclear power plants.
In recent testimony before a House utility subcommittee, Dave Griffing, FirstEnergy Solutions vice president for government affairs, stressed that the company’s nuclear plants provide 90 percent of the state’s clean power.
The funds generated by the new surcharge would not go directly to a utility or to the state’s general fund. Instead they would flow into a clean air fund to bankroll what the legislation calls the Ohio Clean Air Program.
The Ohio Air Quality Development Authority, whose members are political appointees, would run the program and designate which power plants are a “clean air resource.”
Only power plants designated as a clean air resource would be eligible for grants. Wind and solar installations that receive state tax exemptions and production tax credits would not qualify under the terms of the new legislation.
To qualify as a clean air resource a power plant must show:
- It “has made a significant historical contribution to the air quality of the state by minimizing emissions …”
- … or that it “will make a significant contribution toward minimizing emissions.”
- That its revenues come exclusively from the sale of power into wholesale markets and that it is not owned or does not supply municipal power companies or cooperative corporations.
The development of the bailout legislation parallels an effort by FirstEnergy Solutions to emerge from a federal bankruptcy court debt-free and prepared to reverse its planned shutdowns of the Davis-Besse nuclear plant just east of Toledo and the Perry nuclear power plant northeast of Cleveland — if it can win a subsidy from Ohio lawmakers. FirstEnergy Solutions is running a similar legislative effort in Pennsylvania, where it owns a twin reactor plant near Pittsburgh.
Bankruptcy Judge Alan Koschik of the Northern District of Ohio on Thursday dealt a significant blow to the company’s plans to quickly get out of bankruptcy. He rejected a provision that would have indemnified FirstEnergy Crop., parent of FirstEnergy Solutions, against future costs for environmental cleanup of its former power plant sites. FirstEnergy Solutions said it would revise its plan.
EDITOR’S NOTE: This story has been updated to clarify that existing surcharges for clean energy and efficiency would be eliminated, not just made optional.
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