Ohio House passes bill to save nuclear power plants

[July 24, 2019]  (Reuters) - Ohio's Republican-controlled House of Representatives passed a bill on Tuesday to create subsidies to avoid the early shutdown of the state's two nuclear power reactors.

The two reactors - Davis-Besse and Perry - are owned by FirstEnergy Solutions, which has said it would shut the money-losing plants in 2020 and 2021 unless the state provides some financial assistance.

FirstEnergy Solutions is a bankrupt unit of Ohio power company FirstEnergy Corp. FirstEnergy Solutions said shutting the reactors could result in the loss of 4,300 jobs. A nuclear industry group said the units provide about 90% of the state's clean - carbon free - power.

The bill, known as House Bill 6 (HB6), will now go to the Republican Governor Mike DeWine, who has expressed support for the legislation.

The bill comes nearly a month after FirstEnergy Solutions' original June 30 deadline to purchase fuel for the spring 2020 refueling of the Davis-Besse plant.

Officials at FirstEnergy Solutions were not immediately available for comment, but in the past have said the company would work with the state to avoid the Davis-Besse closure if the legislature passed the bill by July 17.

Although the Senate, also controlled by Republicans, passed the bill on that date, the House did not take up the legislation because there were not enough members present to pass it at that time.

The bill that has now passed both houses of the legislature would provide an overall reduction in consumer power rates by weakening the state's renewable and energy efficiency goals even though FirstEnergy Solutions would receive an estimated $150 million a year during the 2021-2027 period to keep its reactors in service.

White House economic adviser Larry Kudlow (L) speaks with Ohio Governor Mike DeWine at a meeting with U.S. Governors at the White House in Washington, U.S., February 25, 2019. REUTERS/Jim Young/File Photo

Analysts said the bill would also provide about $60 million a year through 2030 to keep a couple of Ohio Valley Electric Corp's (OVEC) coal plants in service, one of which is in Indiana. OVEC is owned by American Electric Power Co Inc, Duke Energy Corp and other Midwest utilities.

Several environmental groups have opposed the nuclear bailout because it would subsidize coal plants and weaken the state's renewable and energy efficiency goals.

“Ohio is sending a clear signal to the clean energy sector that they are not welcome," said Daniel Sawmiller, Ohio energy policy director for the Natural Resources Defense Council.

The natural gas industry, meanwhile, opposed the bill in part because gas-fired power plants would make more money if coal and nuclear plants shut.

(Reporting by Scott DiSavino; Editing by Paul Simao and Susan Thomas)

[© 2019 Thomson Reuters. All rights reserved.]

Copyright 2019 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.