FirstEnergy / Nuclear Energy / Ohio Utility Bailouts / Ohio's Clean Energy Future

An Ohio Energy Revolution

(Photo from Wikimedia Commons)

“In the legislative cram-down that has attended H.B. 6, the bill’s utility and labor-union proponents have mouthed a number of weak arguments, hoping to give the bailout some plausible reasoning. None of them have stuck.

First, H.B. 6’s sponsors said that if nuclear power plants went out of business, power prices would rise. This is a bizarre argument: Subsidize power plants or else consumers will have to pay more. It is true that the market today is oversupplied with power resources, and if some close, prices will tighten. But the wholesale market operator, PJM, has studied the issue and anticipates total consumer savings of $1.6 billion if the nuclear plants in danger of closing are replaced by natural gas generators.

Furthermore, it is not even clear that Ohio’s nuclear plants are unprofitable and would close without subsidies. The plants’ going-forward costs appear to be below the anticipated market price of electricity. One analysis, by Paul Sotkiewicz, among the nation’s leading energy economists, projects that the nuclear plants will earn $700 million over the next decade. H.B. 6 would more than double those profits. FirstEnergy disputes Sotkwiewicz’s report but refuses to accept an amendment that would pay out subsidies only if the plant owners open up their books and prove they are unprofitable. That pretty much says it all.”

— Travis Kavulla, National Review

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