FirstEnergy’s next desperate idea: $300 million a year from Ohio taxpayers

For years, FirstEnergy has been looking for a get-out-of-bad-debt card to save it from its failing coal and nuclear plants. First, it tried for a $3 billion bailout from the Ohio Public Utility Commission (PUCO) and failed. Then it went begging in Washington for a federal bailout and failed. It won a $600 million bailout from the PUCO that Environmental Defense Fund is appealing to the Ohio Supreme Court.

Now it has convinced some Columbus lawmakers to introduce H.B. 6, a $300 million per year subsidy to keep the company’s flagging coal and nuclear plants alive and simultaneously kill clean energy standards that have made Ohioans’ air cleaner and created thousands of jobs in the state. H.B. 6 will increase utility bills by $300 million a year for all utility customers, even if they buy their electricity from other suppliers. It’s a corporate handout, plain and simple, and it flies in the face of free market principles. Legislators that value the free market should reject it outright.

The free market can be harsh, especially for the employees that are most severely impacted by risky gambles made by their powerful executives. And FirstEnergy is a case study in risky gambles. It bet big on coal and nuclear and would have made a killing for its shareholders if it had been right. But the market went the other way. Natural gas and clean, renewable energy are beating coal and nuclear electricity on price, and FirstEnergy’s been left holding a bag of bad debt.

FirstEnergy’s next desperate idea: $300 million a year from Ohio taxpayers Click To Tweet

When competition has forced other companies to reduce their workforce or relocate their plants in recent years, it’s been hard for those workers and their families. Examples include General Motors, Goodyear Tire, Honeywell International and Delphi. But did legislators in Columbus give those companies handouts to stop the job losses? They didn’t do it then, and they shouldn’t do it now.

Ohio lawmakers have focused on a few hundred jobs at coal and nuclear plants that could be lost if these plants close. But let’s look at the other side of the story. Ohio has been on a record run of new business creation. Last year, there were over 125,000 new business filings in Ohio. And from 2000-2018, new business filings in Ohio increased by 56%.

So why should FirstEnergy be an exception to the high risk, high reward world of free market competition? The market has made FirstEnergy shareholders plenty of profit. Even as the company has floundered in recent years, its shareholders made hundreds of millions of dollars. Its risky bets don’t deserve help from Columbus, and they certainly don’t deserve a yearly $300 million taxpayer-funded handout.

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