FILE PHOTO: White House economic adviser Larry Kudlow (L) speaks with Ohio Governor Mike DeWine at a meeting with U.S. Governors at the White House in Washington, U.S., February 25, 2019. REUTERS/Jim Young/File Photo
July 23, 2019
(Reuters) – Ohio’s Republican-controlled House of Representatives will likely pass a bill on Tuesday to create subsidies to avoid the early shutdown of the state’s two nuclear power reactors, according to analysts and those watching the legislation.
The two reactors – Davis-Besse and Perry – are owned by FirstEnergy Solutions, which has said it would shut the money-losing plants in 2020 and 2021 unless the state provides some financial assistance.
FirstEnergy Solutions is a bankrupt unit of Ohio power company FirstEnergy Corp. FirstEnergy Solutions said shutting the reactors could result in the loss of 4,300 jobs.
Analysts said the Ohio Senate’s version of the bill, known as House Bill 6 (HB6), would likely pass the House before going to Republican Governor Mike DeWine, who has expressed his support for the legislation. The House passed its version of the bill in May.
“We anticipate the House will pass the Senate version of the bill today,” analysts at Height Capital Markets said on Tuesday, noting that Republican House Speaker Larry Householder “would not have a called a session for today unless he had the necessary votes, in our view.”
The bill comes nearly a month after FirstEnergy Solutions’ original June 30 deadline to purchase fuel for the spring 2020 refueling of the Davis-Besse plant.
Officials at FirstEnergy Solutions were not immediately available for comment, but in the past have said the company would work with the state to avoid the Davis-Besse closure if the legislature passed the bill by July 17.
Although the Senate, also controlled by Republicans, passed the bill on that date, the House did not take up the legislation because there were not enough votes to pass it at that time.
The Senate version of the bill would provide an overall reduction in consumer power rates by weakening the state’s renewable and energy efficiency goals even though FirstEnergy Solutions would receive an estimated $150 million a year during the 2021-2027 period to keep its reactors in service.
Analysts said the bill would also provide about $60 million a year through 2030 to keep a couple of Ohio Valley Electric Corp’s (OVEC) coal plants in service.
Several environmental groups opposed the nuclear bailout because it would subsidize coal plants and weaken the state’s renewable and energy efficiency goals.
The natural gas industry opposed the bill in part because gas-fired power plants would make more money by running more often after the coal and nuclear plants shut.
(Reporting by Scott DiSavino; Editing by Paul Simao)
