1,400 jobs at stake with repeal of HB6


By Mark Williams - The Columbus Dispatch



CResidents of Lake County in northeastern Ohio are back on edge.

So are those in Ottawa County in northern Ohio.

The $61 million Statehouse scandal involving House Bill 6 has raised concerns that the legislation will be repealed and will put the state’s two nuclear power plants at risk — again — of being shut down.

At stake are 1,400 jobs in the two counties along Lake Erie, where the plants are major economic drivers.

“The people of Perry and Ottawa are on pins and needles again. Are they going to have jobs?” said Jerry Cirino, a Lake County commissioner and advocate for the Perry nuclear plant.

The second plant, Davis-Besse, is in Ottawa County.

Residents of both counties thought the plants were saved from closing after the nasty political fight that led to the passage of HB 6 a year ago. The key provision of the law is a subsidy of $150 million a year that is to flow to the plants starting next year and running through 2027.

Then came the arrests of then-House Speaker Larry Householder and four others in a bribery and racketeering scandal linked to HB 6. The five are accused of using the money to back legislative candidates to help Householder regain the speaker’s seat; to pay for advertising to build support for HB 6; and to ensure that opponents of the law did not gather enough signatures in their attempt to overturn it.

Since the scandal erupted in July, some legislators have pushed for the repeal of the legislation, and that worries Cirino and one of his Ottawa County counterparts, Mark Stahl.

“It’s created a lot of anxiety for the men and women who work out there” at the Davis-Besse plant, Stahl said.

The two commissioners say the legislation is good policy for the state despite the scandal.

“We’re talking about an economic cataclysm,” Cirino said of the impact if Perry is closed. “As one elected official, I cannot and will not step back and let this happen.”

What House Bill 6 does

The legislation is best known for imposing a fee of 85 cents a month on residential ratepayers in Ohio beginning in 2021.

The fee will generate about $170 million a year, with $150 million of that going to the nuclear plants. The remaining money will support the development of six solar projects in the state.

Beyond that, the law extends fees of up to $1.50 a month on consumers to shore up two old coal-fired power plants — one of them in Indiana — through 2030. The plants are owned by a group of power companies including Columbus-based American Electric Power.

The law also guts the state’s renewable-energy and energy-efficiency efforts, which opponents of HB 6 say have helped create tens of thousands of jobs in Ohio and reduced the power bills of Ohio consumers.

Proponents of the law say those moves will reduce average monthly electric bills by $2.77, or $1.3 billion over nine years. Opponents say that is misleading because the energy-efficiency programs have helped consumers reduce their electricity bills.

What about Appalachia?

At least eight major coal-fired power plants in Ohio have closed in the past decade, according to data from PJM Interconnection, which manages the electrical grid for the region. Most of them are in Appalachia.

But unlike the nuclear plants in northern Ohio, the coal-fired plants had no one like Householder to advocate for them. Instead, fears similar to those among people in Lake and Ottawa counties became realities in Appalachian communities.

Take Adams County in southern Ohio.

J.M. Stuart Station and the Killen Station closed in March 2017, costing the county of 28,000 at least 500 jobs, according to county Commissioner Ty Pell.

“I wish somebody would have come in and helped us out,” Pell said.

Beyond the job losses, the shutdown of the plants has shrunk the county’s tax base, reducing tax revenue for schools and emergency medical services, Pell said.

Those are the same arguments made by those in Lake and Ottawa counties as to why the nuclear plants should be kept open.

Pell said he would like the state to provide assistance for communities where a power plant has closed. He suggested the aid could be funded through a fee on utility bills administered by the Public Utilities Commission of Ohio.

The Ohio Coal Association stayed out of the debate over HB 6, even though the legislation helps two coal plants, said the association’s president, Mike Cope.

“Am I worried about the premature closing of coal plants? Absolutely,” he said. “What we want is fairness.”

Like the nuclear plants, coal-fired power plants have struggled to compete with the cheap, abundant supply of natural gas being produced by drilling in eastern Ohio, West Virginia and Pennsylvania.

Coal, once the fuel that powered Ohio, generated just 39% of the state’s electricity in 2019, according to the Energy Information Administration. That was the year that natural gas became the top source of electricity in Ohio, at 43%.

The coal industry has lost thousands of jobs in Ohio as a result of the shutdown of coal-fired plants and the coal mines that support them, Cope said.

FirstEnergy’s role

Akron-based FirstEnergy used to own the nuclear plants and lobbied for HB 6, although the power company has said that it gets no financial benefit from the legislation. It also fought the failed effort to repeal the legislation.

The company, its services subsidiary and its political-action committee have been served with subpoenas from federal investigators concerning the Statehouse investigation. The company has said it has done nothing wrong and is cooperating with investigators.

It also has acknowledged that it contributed about 25% of the $61 million that is at the heart of the scandal, a sizable sum for a company that says it gets no benefit from HB 6, said Charles Fishman, an equity analyst at market research firm Morningstar.

“Although it is common for regulated utilities to attempt to influence energy policy and contribute to politicians and political-action committees, the amount of the contributions is unusually large, and we struggle with why most of these payments were made with little direct benefit that we know of to FirstEnergy,” Fishman said in a new report.

Without the subsidies promised under HB 6, the nuclear plants will struggle to compete in energy markets because of the cheap price of natural gas, he said.

“I suspect they’re not bluffing,” Fishman said of the threats to close the plants, which now belong to a former FirstEnergy subsidiary called Energy Harbor. “I think those plants will shut down if they don’t get some subsidy.”

New York, New Jersey and Illinois have provided similar subsidies for their nuclear plants.

Nuclear is different, HB 6 backers say

A poll conducted by EMC Research and the Tarrance Group this month found that nearly two-thirds of Ohioans support the repeal of HB 6.

But supporters of the law say the state’s two nuclear plants are different from the coal-fired plants that Ohio has historically depended on for electricity.

For starters, the two plants generate 14% of Ohio’s electricity, making them important to the stability and affordability of the power grid, the supporters say. Plus, the plants generate nearly all the state’s carbon-dioxide-free electricity.

The commissioners in Lake and Ottawa counties say they were as surprised as anyone else when the scandal erupted.

Repealing HB 6 would be a mistake unless there is a ready replacement, they say. Instead, the state should take time to study the issue.

“Calls to repeal, with a promise to replace later, are not believable,” said Lake County’s Cirino. “Our leaders need to take time to develop a replacement bill that will be better than HB 6.”

By Mark Williams

The Columbus Dispatch

Post navigation