FirstEnergy nuclear bailout

FirstEnergy has made its legislative priority for 2019 clear: bailouts for the Davis-Besse and Perry nuclear plants, which are owned by subsidiary FirstEnergy Solutions, and scheduled to close in 2020 and 2021, respectively.

This push for a government-mandated bailout arrives as FirstEnergy attempts to formally separate itself from FirstEnergy Solutions, which is currently going through bankruptcy, in part thanks to its aging coal and nuclear plants. The plants are no longer able to compete with cheap natural gas and the increasingly competitive price of renewable energy. This bailout request also comes just as Governor Mike DeWine takes office. FirstEnergy ranks as the top campaign contributor in each of Mr. DeWine’s last three elections (for governor and attorney general).

FirstEnergy has already received $11 billion from consumer bailouts

This isn’t the first time FirstEnergy has asked consumers to bail them out, and if they receive this money, it certainly won’t be the last. In the past 20 years, FirstEnergy has received $11 billion from bailouts. And this time, it likely won’t just be FirstEnergy customers whose rates increase.

The utility tried for a customer bailout in 2018 through a Zero Emissions Credit scheme that failed to make it out of committee. That bill would have inflicted serious pain on FirstEnergy’s industrial customers and was opposed by the Ohio Manufacturer’s Association, among others. It appears their new approach is to spread the pain around, arguing that since nuclear power emits no carbon, the entire state benefits from nuclear power and therefore should pay to keep the plants open.

FirstEnergy is borrowing from the playbook of utilities in New York, Illinois, and New Jersey, where recent nuclear bailouts are projected to lead to statewide increases on electric bills, regardless of the customer’s service territory. In Illinois, bills are expected to increase by $171 per year, and in New York they’re expected to increase by $181 per year.

Ohio consumers shouldn’t have to pay extra to bail out uncompetitive and aging plants, especially since these plants aren’t necessary to meet Ohio’s energy needs.

The CEO of the PJM Interconnection, which operates the power grid in Ohio, told Bloomberg Television that 18,000 MW of coal and nuclear plants are slated to close this year, but the grid could handle 30,000 MW of closures without inconveniencing customers. A 2018 analysis from PJM ruled that all of FirstEnergy Solutions nuclear plants that are scheduled for closure can be shuttered without affecting our grid reliability.

If these nuclear plants receive yet another bailout, they will be open for at least another 18 years. Ohio consumers can’t afford nearly two more decades of increased electricity rates to pay for nuclear plants that aren’t needed. Contact your legislators and tell them you’re against FirstEnergy’s nuclear bailout.

To read the bill, visit the Energy and Natural Resources Subcommittee on Energy Generation page at the Ohio House of Representatives site under May 2, 2019.