COLUMBUS, Ohio — Energy Harbor is lobbying for state lawmakers to allow it to decide whether to accept more than $1 billion in House Bill 6 bailout money for its two nuclear power plants because a federal regulatory ruling might otherwise make the subsidies a liability, according to a top lawmaker.
It’s still unclear whether legislators will agree to the proposal, which is being crafted by House Majority Leader Bill Seitz, or whether they will pass any reforms to HB6 at all on Tuesday, expected to be the final day of the current legislative session.
But it shows that Energy Harbor, a former subsidiary of FirstEnergy, is working behind the scenes to influence what reforms might be made to HB6, which is at the center of what authorities say is the largest bribery scheme in Ohio history. Federal authorities say $60 million in FirstEnergy bribery money was used to pass the law and keep it on the books.
Under the 2019 law, Energy Harbor’s Davis-Besse and Perry nuclear power plants are set to get $150 million per year from ratepayers from 2021 until 2027. Energy Harbor officials have said without the bailout, they will have to close the plants, though they’ve offered no financial data to back their claims.
But after the HB6 scandal broke last summer, GOP lawmakers have been working on possible changes to the law — including requiring yearly audits to see how much money the nuclear plants need to break even, then adjusting accordingly the amount of subsidies paid to Energy Harbor.
Seitz, a Cincinnati Republican, said he and Energy Harbor lobbyist Michelle Fitzgibbon are working on a proposal that would allow the company to decide, based on their financial calculations, whether it wants to be eligible for the bailout money.
The reason Energy Harbor might not want the money is that late last year, the Federal Energy Regulatory Commission ruled that power generation companies that receive state subsidies (like the ones offered by HB6) can only sell their electricity in the region’s long-term, regional capacity market at a higher rate that what they would otherwise be able to charge. This “minimum price offer rule” would likely make it much harder for Energy Harbor to sell electricity from the two nuclear plants.
An added wrinkle, Seitz said, is that federal energy regulation is “in a state of flux” given that Democrat Joe Biden will replace Republican Donald Trump as president next month. “With the incoming Biden administration, they’re probably not going to want to have that [FERC rule] count against generators of carbon-less electricity,” Seitz said.
Seitz said the proposal, overall, would allow Energy Harbor to make “an objective, reasonable judgment whether it is better to go for the subsidy, then the audit, or to go for their chances in the capacity market.”
He added: “We’re not trying to screw them, but we’re trying to make them own their choice.”
Phone calls made Sunday to an Energy Harbor spokesman, as well as Michelle Fitzgibbon (the Energy Harbor lobbyist Seitz said he was working with on the reform proposal), were not immediately returned.
House and Senate leaders are still working to craft an HB6 reform plan that has the votes to pass both chambers. The main reform plan, House Bill 798, would delay the start of the bailout until 2022 to provide time for an audit to be conducted.
When asked whether lawmakers were close to a deal, Seitz said, “That’s kind of above my pay grade.”
But if an HB6 reform proposal does move forward, Seitz said lawmakers critical of HB6 will have “a binary choice” to make.
“For those of you that would like to repeal House Bill 6 or would like to do other things with House Bill 6,” Seitz said, “Well, your choice is this or let House Bill 6 continue.”