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Ohio nuclear bailout ends – showing the folly of subsidising nuclear power

Ohio Ends Nuclear Bailout Scheme: Here’s What it Means

April 1, 2021  
Ohio Gov. Mike DeWine signed the bill repealing the state’s $1.1 billion nuclear bailout yesterday. Ohioans have been fighting to stop and then repeal the bailout law (HB6), since 2019. Their struggle goes back even further, to 2014, when FirstEnergy launched into a series of four other failed nuclear and coal bailout schemes. It took a $61 million corruption conspiracy for FirstEnergy to get HB6 enacted two years ago — for which four lobbyists and the former Speaker of the Ohio House of Representatives were indicted last year.

This is a huge victory for everyone in Ohio who worked to make it happen!

Notably, Energy Harbor, the company that now owns the two nuclear power plants in Ohio, says that it no longer needs the nuclear bailout, signaling that it won’t be coming back to the legislature for a sixth bite at the apple. Energy Harbor was formed as a corporate spinoff, resulting from the bankruptcy of FirstEnergy’s former subsidiary, FirstEnergy Solutions. Energy Harbor’s statement underscores the point that the bailout and the corruption scheme were ultimately a ploy to get FirstEnergy’s creditors in the bankruptcy case to approve the stand-alone, spun-off corporation that only owns unprofitable nuclear and coal power plants.

Energy Harbor is now free to run into the ground, as far as FirstEnergy is concerned. But who knows – maybe it will continue running the Davis-Besse and Perry reactors without a bailout, just like it decided to do with its Beaver Valley 1&2 reactors in 2020, despite having already notified the Nuclear Regulatory Commission that it would close all four by the end of this year. Whatever the case, it shows that nuclear bailouts have never been a supposed “bridge” to a clean energy future – they are an opportunistic scheme by nuclear utilities to make the public assume the costs of their own short-sighted, self-interested business decisions.

To underscore that point, the nuclear bailout repeal leaves everything else in HB6 in place: the coal plant bailout, the limited funding for already-approved solar projects, and the rollback of the renewable portfolio and efficiency standards. Even FirstEnergy’s decision to rebate $26 million in utility subsidies is part of a court settlement in a lawsuit, not a result of the nuclear bailout repeal. Why? Because dirty energy interests still have too much influence in Ohio politics.

Ironically, Ohio’s other major utility conglomerate, AEP, is now the biggest beneficiary of HB6, since it is the largest co-owner of the bailed-out coal plants (which were originally built to power the federal government’s massive uranium enrichment plant in southern Ohio). AEP gave up its appeals for coal plant subsidies after failing in 2015, but FirstEnergy came back again and again, eventually cutting AEP and the coal plants in on HB6 to buy enough political support to pass the nuclear bailout.

The bailout repeal also leaves in place other anti-renewable energy laws FirstEnergy lobbied for, including the 2014 law imposing severe restrictions on siting wind power projects that have effectively killed onshore wind in Ohio.

Other states should take a lesson from Ohio, as nuclear utilities propose more bailout and spinoff schemes. In New Jersey, PSEG and Exelon are pushing to extend their $300 million/year nuclear bailout, while both companies are trying to pass off ownership of their power plants. PSEG announced last year that it plans to sell off all of its power plants except for its Hope Creek and Salem 1&2 reactors, presumably holding onto the latter for now because no other company will buy reactors that PSEG has argued for years are not profitable enough without subsidies.

Then, in February, Exelon, by far the largest nuclear power company in the US, announced that it plans to spin off all of its power plants into a separate company, while still promoting an expanded bailout for its reactors in Illinois and a longer-term “carbon charge” subsidy for its reactors in New York. (As of today, New Yorkers are four years and more than $2 billion into a 12-year, $7.6 billion bailout.) Exelon co-owns the Salem reactors with PSEG in NJ, as well. Exelon’s spin-off plan is a stark vote of no confidence in the future of nuclear power: if Exelon can’t make nuclear power plants profitable enough to hold onto — even with $1 billion/year in ongoing subsidies — then who could?

Over the last several years, nuclear bailouts have been sold to policymakers and the public as a “bridge” to a clean energy future. In reality, they are a bridge to nowhere — just public subsidies for corporate restructuring schemes. Electricity customers in New York, Illinois, and New Jersey have paid over $3.5 billion in nuclear subsidies since 2017, for reactors that Exelon now just wants to get rid of.

This is no way to solve the climate crisis. The only bridge to a zero-emissions, renewable energy future is to build more and more zero-emissions renewable energy, efficiency, and supporting infrastructure. Wasting time and money propping up old nuclear and fossil fuel companies is only holding us back.

April 2, 2021 - Posted by | Uncategorized

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