Energy Exchange

Ohio’s legislature passed FirstEnergy Solutions’ bailout bill last month over deafening and unusually widespread opposition. House Bill 6 not only grants the bankrupt energy company $150 million a year in ratepayer funds to bail out its uneconomic nuclear plants, it also subsidizes dirty coal units and guts the state’s clean energy industry that has created 112,000 jobs, with more than 5,000 in 2018 alone.

For FirstEnergy, it was a brilliant twofer — obtain massive subsidies and stifle competition. But it looks like Ohioans may have the final say in the voting booth.

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Since it was first filed in the Ohio legislature, HB 6 has been pitched as a necessary savior for a struggling Ohio utility and employer. FirstEnergy Solutions’ nuclear plants are losing money, the sales pitch goes, and the publicly-traded company needs $150 million a year by June 30 or it will shut down the plants and Ohio will lose 4,000 jobs.

Let me suggest that everything about this is wrong.

The June 30 deadline was wrong

We know now that the June 30 deadline was wrong because, well, it’s after June 30. When the deadline passed, FirstEnergy told reporters that it will proceed with taking steps to shut down the plants, but it can reverse course at a later date. Perhaps FirstEnergy’s leadership knew it was a false deadline, like the many other times the company cried wolf.

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Update: On August 20, the Ohio Supreme Court rejected FirstEnergy’s motion for reconsideration of “credit support” charges approved by state regulators in 2016. The Supreme Court ordered the charge be removed, saying state regulators had failed to place the necessary conditions on how FirstEnergy spent the subsidies. 

In the three years’ time the appeals process has taken, FirstEnergy has collected nearly all of the $600 million it was seeking. Current law states that FirstEnergy gets to keep the $600 million rather than refund it to customers. Environmental Defense Fund and our partners have been working hard to change the refund law and today’s ruling should give added momentum to this effort.

The Ohio Supreme Court today rejected FirstEnergy’s “credit support” charges approved by state regulators in 2016. The Supreme Court ordered the charge be removed, saying state regulators had failed to place the necessary conditions on how FirstEnergy spent the subsidies.

For years, FirstEnergy has been seeking a bailout for its uneconomic coal and nuclear plants. The Ohio-based utility finally got its wish in late 2016, when the Public Utilities Commission of Ohio approved more than $600 million in customer-funded subsidies.

Today the Ohio Supreme Court ruled that those customer funded subsidies must be removed. In the three years’ time the appeals process has taken, FirstEnergy has collected nearly all of the $600 million it was seeking. Current law states that FirstEnergy gets to keep the $600 million rather than refund it to customers. We have been working hard to change the refund law and today’s ruling should give added momentum to this effort.

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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.

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Ohio’s electric industry is thriving and our energy supply is getting cleaner, with average power costs well below the national average. This dreamy scenario is the envy of other states – but Ohio’s legislators are plotting in the Capitol Square statehouse to turn this dream into a nightmare.

This nightmare is a new bill that not only subsidizes uneconomic coal and nuclear plants, but also guts the renewable energy and energy efficiency standards that have led to more than $1 billion in savings and thousands of new jobs for Ohioans. In an Orwellian twist, the legislators are trying to sneak this bailout through by calling it a “clean air resource” bill.

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