Even with 1,500 jobs on the table, including the 192 Ashtabula County residents employed by the Perry Nuclear Power Plant, an Ohio General Assembly plan to bailout the state’s two nuclear plants is going to be a tough sell to citizens.
Currently, the Perry Nuclear Plant in Lake County and the Davis-Besse Nuclear Power Station in Ottawa County could be closed by 2021. Ohio lawmakers are considering a bill that would place a surcharge — $30 annually for residential customers and $240 for commercial users — on electric bills in the state. The surcharge would generate $300 million each year for clean energy production, with half of that going to the nuclear power plants owned by FirstEnergy Solutions.
The company promises the surcharge will be offset by the end of “green energy” mandates and fees that would be eliminated in the legislation. The company also says saving the plants would spare Ohio residents from an increase that would hit power bills if they closed. But that claim has been met with skepticism, as much of the electricity the plants generate is actually shipped out of state. When the plants were first built, they came online with the promise of lowered electric rates and a reduced dependence on fossil fuels – neither of which has panned out.
FirstEnergy Solutions is in this position because of its own poor business decisions. Spun off into a subsidiary from its parent company, FirstEnergy Solutions is in bankruptcy, and both nuclear power plants are too expensive to operate and survive in a deregulated free market. Should lawmakers bailout the plants — and don’t let FirstEnergy Solutions spin the situation, it is clearly a bailout — there is no promise, or even a hint of hope, that another company is in position to buy the plants.
Admittedly, 1,500 jobs between the two plants is hard to walk away from — and that is the crux of the issue. Many of those jobs are extremely technical and specialized, so closing the plants means a portion of those employees will certainly leave the state in search of other jobs in their field — though some will stay and put those skills to use in other high-demand, high-paying jobs. But there will be serious repercussions if the plant closes, particularly to school districts in neighboring Lake County that rely on the plant’s property tax revenue.
The question then becomes: how much should 1,500 jobs be worth to Ohio taxpayers? We have talked about these false victories before, where incentives are given away in the name of saving or creating jobs and they fail to have the desired effect, particularly when looking at the cost to taxpayers per job. So, if lawmakers ultimately decide they must bail out the plants there must be iron-clad strings attached.
First, the current jobs must be retained with a pledge not to cut or automate the jobs away in the future. Second, the surcharge needs to be applied fairly based on usage — rather than a flat fee that could see some users bills skyrocket in proportion to their use. Third, Ohio must continue to support green energy beyond nuclear power. While there is still a long way to go for wind and solar — 90 percent of Ohio’s green energy comes from nuclear plants — there is opportunity for growth there and if the state is going to offer incentives for green energy they should not focus solely on the nuclear plants just because that is the easiest option today.
And finally, it is time to get the Public Utilities Commission of Ohio involved in regulating the electric generation industry. PUCO currently has no oversight as it is “completely deregulated” and at the whim of “market forces.” If taxpayers are going to fork over $150 million annually, FirstEnergy Solutions should be required to justify the need to PUCO regulators every year. There is a reason we call them “utilities” and utilities cannot be deregulated, free market entities without eliminating the goal of having them available to all.
Balancing clean energy and economic interests is often a high-stakes balancing act, and there is no easy answer to the dilemma presented by the Perry and Davis-Besse plants. But whatever decision state leaders make, a pure bailout and give away that pads the profits of a company at the expense of taxpayers, even in the name of jobs, would be a mistake.