The impetus for Ohio House Bill 6, is the undeniable fact that energy markets are changing, making nuclear and coal-fired power uncompetitive with natural gas and renewables for electricity generation. FirstEnergy Solutions is seeking a bailout of its two nuclear plants, Davis Besse and Perry. Its remaining coal-fired power plant in Ohio, Sammis, may benefit from the bailout as well. If the bill passes, the cost to Ohio consumers and businesses is estimated at more than $300 million per year in perpetuity.
Ironically, although bailout proponents acknowledge the role of market forces in creating current conditions, they are using distorted and, in some cases, highly misleading arguments about the way energy markets work to bolster their arguments for House Bill 6.
The Institute for Energy Economics and Financial Analysis (IEEFA) has examined the claims made by FirstEnergy and its supporters and has found that:
- FirstEnergy’s nuclear and coal plants are not needed to ensure electricity supply or reliability in Ohio.
- Taking the nuclear plants off the market is unlikely to drive up electricity rates in Ohio – but reducing energy efficiency and renewable energy could have that effect.
- If Ohio is serious about providing low cost sources of clean energy, it would make more economic sense to invest in solar energy than to subsidize aging nuclear plants.
IEEFA recommends that Ohio follow the lead of New York state and allocate resources to support the tax bases of all school districts and communities going through the economic transition caused by the closure of coal and nuclear plants.
The state should also embark on a serious program to support workers who lose their jobs when coal and nuclear plants close. This should include pushing for thorough and timely clean up and decommissioning of these facilities, with hiring preferences for people currently employed at the plants.