Ohio readies bill to dump more money into coal and nuclear plants, industry groups explain how misguided it is

Ohio utility solar

While Illinois and Minnesota are driving forward solar energy policy in the Midwest, Ohio, the home state of Solar Builder, continues to embarrass itself and cling to the past. There is a bill before the Ohio General Assembly (HB 6), aimed at rescuing FirstEnergy Solutions’ aging nuclear and coal-fired power plants and effectively eliminating its renewable energy standards (which is only set to top out at 12.5% by 2027 anyway). Analysis by the independent Ohio Legislative Service Commission explains that HB 6 would exempt Ohio ratepayers from bearing the cost of the state’s existing renewable and energy efficiency programs. This would ultimately reduce electric utilities’ requirements for these critical clean energy programs.

There is no gray area here: This is bad policy, both for the environment and for ratepayers. SEIA sent an email last week urging Ohioans to get in touch with their legislator to fight back, and a briefing note released by the Cleveland-based Institute for Energy Economics and Financial Analysis (IEEFA) shows how HB 6 may end up costing Ohio consumers and businesses more than $300 million per year “in perpetuity.”

“Proponents of this ill-advised bill are using misleading arguments to warn about nonexistent dangers to the electricity supply and rising energy costs,” said IEEFA director of resource planning analysis and author of the briefing note David Schlissel. “The data shows, to the contrary, that Ohio has ample energy supply and that retiring the plants in question would in no way undermine the reliability of the system or raise costs.”

The bill would keep open FirstEnergy Solutions’ Davis-Besse and Perry nuclear power plants and could also provide revenue for the Sammis coal-fired plant in Ohio. There is no evidence to suggest that extending their operational lifespans would benefit consumers.

IEEFA 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 would be unlikely to drive up electricity rates – but reducing energy efficiency and renewable energy would.

• Investing in solar and other renewables would make sense rather than subsidizing aging nuclear and coal-fired plants.

PJM, the operator of the regional electricity market, has concluded that the deactivation of FirstEnergy Solutions’ nuclear power plants in Ohio and Pennsylvania will have no effect on the reliability of the electric power grid. Ohio would have enough generating capacity even if Davis-Besse and Perry were retired as currently planned in 2020 and 2021.

For example, since 2017, more than 3,200 MW of new generating capacity has come online in Ohio. Another 7,800 MW of new generating capacity is in some stage of development, according to PJM.

As for the claim that retiring the nuclear plants will lead to increased electricity rates, it is apparently based on several studies done over the past two years for FirstEnergy Solutions and a group called “Nuclear Matters” by The Brattle Group, a consulting firm.

“Those studies by the Brattle Group were based on misleading assumptions about the cost of renewables and inflated notions about how much energy the nuclear plants were actually providing to the system,” said Schlissel. “This bill is clearly designed to benefit FirstEnergy Solutions and not Ohio ratepayers.”

Investments in renewables and energy efficiency actually reduce energy market prices by displacing more expensive generation from gas-fired and coal-fired generators, according to research done by First Energy itself in its 2017-2019 Energy Efficiency Plan. In it, FirstEnergy noted that while efficiency programs cost $323 million, they would
generate $988 million of customer savings over the course of the plan. AEP similarly calculated in its 2017-2019 plan that at a cost of $284 million, energy efficiency measures would save customers $2.2 billion over the lives of the measures.

IEEFA recommends that Ohio follow the lead of New York state and allocate resources to support the tax bases of school districts and communities undergoing economic transition caused by the closure of coal and nuclear plants.

The briefing note suggests that the state design a program to support workers who lose their jobs when coal and nuclear plants close. Such a program should also include thorough and timely clean-up and decommissioning of these facilities, with hiring preferences given to former plant employees, according to IEEFA.

— Solar Builder magazine

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