House bill 6, bailing out Ohio's two nuclear power plants, passed earlier this week, and local officials weighed in on the new law.
The law establishes a clean air council, while providing funds for nuclear and solar power providers. $150 million per year will be given to nuclear plants, and $20 million will go to solar plants. The new law also subsidizes the Ohio Valley Electric Corporation, which runs two coal-fired power plants, one in Ohio and one in Indiana.
The OVEC power plants will receive a maximum of $1.50 per month per ratepayer in Ohio. The OVEC plants were both built in the 1950s, according to the OVEC website. They were built to provide power to a uranium enrichment plant, which closed in 2003.
FirstEnergy Solutions operates both the Perry and Davis-Besse nuclear power plants, the only two nuclear power plants in Ohio.
The law's final version passed both the state House — 51 to 38 — and Senate — 19 to 12 — before reaching Gov. Mike DeWine's desk for signature.
John Patterson, who represents Ashtabula County in the Ohio House of Representatives, said his vote in favor of the bill was to preserve 200 jobs in Ashtabula County. "For us, on the cusp of recovery here, losing 200 jobs would be absolutely horrific," Patterson said.
Patterson hopes that Ohio's energy production looks different when the bailout expires. Currently, Ohio gets around 40 percent of its power from coal, and 40 percent from natural gas. "Right now, we, in northeast Ohio, and in other parts of the nation where our electricity is shipped, count on that production," Patterson said.
"This is one that I mulled over for months," Patterson said. "I knew it was coming. ... I always try to make the best decision I can. At that point, I must, given all the factors I have access to."
"Now, was I jumping up in joy for this bill? Heavens no. Because it does bother me that it's short sighted. It bothers me that FirstEnergy has made some, in my opinion, ill advised business decisions, ... but I have to look at the whole picture for my people," Patterson said.
Ashtabula County Commissioner J.P. Ducro was pleased with the passage of the bill.
"I think, had Perry closed, it would've had a very negative effect on Ashtabula County," Ducro said. "It's a large price tag, ... and it's not a perfect arrangement, but I think under the circumstances, there's more good than bad in the bill, at least for us here in Ashtabula County," he added.
"You've got jobs, you've got a tax base for schools, ... there would've been a big ripple effect," Ducro said.
Jerry Cirino, a Lake County commissioner, helped conceive of H.B. 6. "It's something I've been working on for over two years, since I've been a commissioner," Cirino said.
The closing of the plant would cost the area all of the 900 jobs at the plant, and 700 jobs indirectly, from businesses that serve the plant, Cirino said. "We're concerned about it both from the energy policy standpoint, as well as the economic impact on the community," Cirino said.
The law requires a company applying for the bailout to be subjected to an audit before receiving any money.
"There's a lot of hurdles that have to be run through," Cirino said. "I think there's adequate provisions for auditing and safeguarding, making sure that the ratepayers' contributions to continuing clean energy are not wasted in any way, and that there's no fraud involved."
State Senator Sean O'Brien voted against the bill.
"It's a bailout, again, for FirstEnergy, and since 2000, ratepayers in Ohio have given FirstEnergy $12 billion," O'Brien said. "I don't understand why their shareholders aren't bearing the responsibility of their financial mistakes and investments."
"You know, I have Lordstown in my district, that just went under, and I don't see a bailout for them. We lost over 4,500 jobs in the last three years from there, and about 10,000 ancillary jobs, direct jobs that supplied that plant, and there's no bailout for them," O'Brien said. The Lordstown assembly plant, run by GM, closed in March.
"It's still going to have to compete against cheap, Ohio, natural gas. As more plants come online, it's going to drive the price down even cheaper. Our investment in this is not a good investment because it's an aging technology that's not competitive, and we're going to have to end up bailing them out again and again," O'Brien said. "(FirstEnergy's) shareholders, fundamentally, should be responsible for this. It's their company. They get the profits when they're doing well, but when there's losses, it's the ratepayers that have to pay for it, and their bills are going up. I just couldn't agree with a corporate bailout like this, and it's time after time after time. And it's the ratepayers who have to bear the brunt of it."
O'Brien mentioned a recent Supreme Court case, "In re Application of Ohio Edison Co.," where the court ruled that a rate increase, called a distribution modernization rider, was impermissible, because it was suggested as an incentive, but there were no strings attached to the money.
"I'm for the jobs, and I'm concerned about the jobs, but you've got to remember that we built one plant in Trumbull County, and we're building another plant soon, gas fired, that uses all union workers, the same unions that are up in Perry and Davis-Besse," O'Brien said.
"While the rest of the country is moving forward, Ohio is moving backward, and I can't support that," O'Brien said.