Ohio governor signs bill to save nuclear power plants

Source: By Scott DiSavino and Sumita Layek, Reuters • Posted: Thursday, July 25, 2019

(Reuters) – Ohio’s governor signed a bill on Tuesday to create subsidies to avoid the early shutdown of the state’s two nuclear power reactors, according to analysts tracking the legislation.

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 (FE.N). FirstEnergy Solutions said shutting the reactors could result in the loss of 4,300 jobs. A nuclear industry group said the units provided about 90% of the state’s clean – carbon-free – power.

Earlier on Tuesday, Ohio’s Republican-controlled House of Representatives gave final legislative approval to the measure. Republican Governor Mike DeWine had expressed support for the legislation. The governor’s office could not immediately be reached for comment.

The new law will 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

Several environmental groups opposed the measure, citing the weakened renewable energy goals. They are considering options including a possible referendum to try to get voters to overturn the new law.

“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 Defence Council.

The bill’s passage came 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 had 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.

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 (AEP.N), Duke Energy Corp (DUK.N) and other Midwest utilities.

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

Reporting by Scott DiSavino in New York and Sumita Layek in Bengaluru; Editing by Susan Thomas and Peter Cooney