May 29, 2019 / 6:49 PM / 6 months ago

Ohio House passes bill to save nuclear power plants

(Reuters) - The Ohio House of Representatives passed a bill on Wednesday that could cost power consumers about $190 million per year to save the state’s two nuclear power reactors from early retirement.

The bill would also allow solar generation to qualify for clean air credits, sets a cap to prevent windfall profits during times of high power prices and provides financial support for Ohio Valley Electric Corp’s (OVEC) coal plants in Ohio and Indiana.

The bill, House Bill 6, now goes to the state Senate.

Ohio energy company FirstEnergy Inc’s bankrupt FirstEnergy Solutions subsidiary owns the two nuclear reactors located at the Davis Besse and Perry power plants on Lake Erie.

FirstEnergy Solutions has said it will shut the money-losing reactors in 2020 and 2021 unless they receive some financial support from state or federal programs, which the company estimated could result in the loss of 4,300 jobs.

“This bill provides an effective legislative solution to keep (FirstEnergy Solution’s) nuclear power plants open for many years to come,” FirstEnergy Solutions said in a statement.

Cheap and ample gas from shale fields like the Marcellus and Utica in Ohio has depressed electricity prices across the country over the past several years, making it uneconomical for generators to keep operating some nuclear and coal-fired power plants.

The American Petroleum Institute (API), a trade group for the oil and natural gas industry opposed to nuclear subsidies, released a report on Tuesday showing the reactors would be profitable over the 2019-28 period.

FirstEnergy Solutions called API’s release of the report the night before the scheduled House vote “a last-minute, desperate attempt to use misinformation to mislead Ohio legislators” and said the report’s “calculation of profitability is deeply flawed.”

Analysts at Height Capital Markets in Washington said they expect the state legislature will ultimately send a nuclear subsidy bill to Ohio Governor Mike DeWine by the end of June.

DeWine said in a statement supporting passage of the House bill that “Ohio needs to maintain carbon-free nuclear energy generation as part of our energy portfolio.”

The Sierra Club, meanwhile, criticized the bill because it repeals Ohio’s clean energy and efficiency standards while taxing electric customers to bail out FirstEnergy Solutions’ Ohio nuclear plants and OVEC’s coal plants.

Reporting by Scott DiSavino; editing by Andrea Ricci, Sonya Hepinstall and Chris Reese

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