Senate Bill 128: Overcharging Ohio Consumers to Bail out FirstEnergy
The Alliance for Energy Choice urges Ohio lawmakers to reject this harmful, one-sided proposal
COLUMBUS, OH – The proposed Zero Emission Nuclear Resource Program (ZEN) in SB 128 would force families and businesses in the FirstEnergy service territory to subsidize the company’s nuclear power plants by mandating customers pay the utility hundreds of millions of dollars on an annual basis to keep the plants open.
“Enactment of this legislation will drive up Ohio electricity costs and require customers to pay a massive energy tax with no tangible benefit for the families and businesses paying the bill,” said Alliance spokesperson, Todd A. Snitchler, a former Ohio legislator and PUCO Chairman. “Rather, this energy tax is solely intended to improve the company’s bottom line. What is more, FirstEnergy says that even after receiving the subsidy they will sell the plants to another operator. This proposal raises the sale price to benefit FirstEnergy and leaves Ohio’s families and businesses paying the bill. SB 128 will cause irreparable harm to regional wholesale and retail power markets upon which all Ohioans rely.”
Senate Bill 128 was introduced after months of speculation that FirstEnergy continued to explore ways to secure additional revenue. This plan obligates FirstEnergy’s ratepayers to subsidize its failing unregulated generation business. SB 128 requires subsidies for Ohio nuclear plants, but also contains a provision that could require Ohio ratepayers to pay additional subsidies to FirstEnergy’s other nuclear plants as well.
“Under the cloak of environmental stewardship and resource diversity, FirstEnergy is attempting to secure one of the largest rate increases in Ohio utility history. This reckless proposal shifts all of the risk and negative outcomes from the company and squarely onto its Ohio customers,” Snitchler said. These charges come on the heels of the recently approved Distribution Modernization Rider that will add an additional $200,000,000 annually to FirstEnergy customers’ bills for the next three to five years.
PJM, the regional grid operator responsible for ensuring electric reliability in Ohio and 12 other states and the District of Columbia recently released a report affirming that Ohio is not in jeopardy of a reliability crisis even if the nuclear plants retire. Ohio has experienced a significant drop in the state’s carbon emissions since 2005, much of which can be attributed to the retiring of aging coal plants that are being replaced with new, efficient natural gas plants. The State of Ohio is currently in the midst of an energy renaissance as record low prices for natural gas extracted from the state’s vast Utica shale reserves have driven private investment in new natural gas plants across the state without requiring customers pay for them. Nearly a dozen plants are in the planning or construction phases with the first plant set to come online during the summer. These new, efficient gas plants are helping to diversify Ohio’s generation fuel mix while also providing billions in investment, much needed local and state tax revenues, and increased employment.
“FirstEnergy is perpetrating a ‘Chicken Little’ scheme whereby it claims the sky will fall in Ohio if the company is not granted hundreds of millions in generation subsidies on a yearly basis from its customers,” Snitchler said. “At what point do we finally require the company to accept responsibility for its business decisions instead of unfairly putting that burden on FirstEnergy’s customers?”
“We understand the impact the Davis-Besse and Perry plants have on the communities and people of Ottawa and Lake Counties. But we must be mindful that billions of dollars in investment and employment important to eastern and southern Ohio hang in the balance with this bill,” said Snitchler. “SB 128 will severely hinder the ability for private investors to compete and discourage their future investment in our state. The ZEN program will only provide FirstEnergy’s nuclear plants with a large and unfair subsidy to the detriment of everyone else in Ohio – customers and competitors alike.”
About the Alliance for Energy Choice: The Alliance for Energy Choice is an Ohio non-profit corporation that seeks to promote fairness and competition among electric utilities. The Alliance advocates for market solutions that will ensure adequate and fairly priced supply of electric power to Ohio’s residents and businesses. The Alliance also advocates for a level playing field for energy companies that does not favor one supplier over another. Alliance members: Advanced Power, Calpine, Dynegy, Eastern Generation, Energy Professionals of Ohio, and NRG Energy.
CONTACTS
Alliance for Energy Choice
Todd A. Snitchler, Principal, Vorys Advisors LLC Office: 614-464-6222 Cell: 330-316-7492 tasnitchler@vorysadvisors.com