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31 May 2019

Ohio backs plan to bail out nuclear and coal at $300 million cost

Ohio has opted for the bold move of providing a $190 million fund to subsidize two nuclear power plants, which although currently profitable, are owned by bankrupt First Energy Solutions. About $300 million in total will be put through in a subsidy which includes two coal fired plants getting subsidies, benefiting owners America Electric Power, Duke Energy, FirstEnergy, AES, PPL and CenterPoint Energy among others.

The move is confusing to say the least, not just because the two nuclear plants are not themselves under threat, and the nuclear subsidy is just a profit kicker for them – they are among the two most profitable nuclear plants in the US, employing over 4,000 people. So this looks like a bribe to save jobs, which is intended to push the 2020 election in Donald Trump’s favor.

Local US newspapers revealed that a Trump aid bullied a handful of key voters in the Ohio Lower House vote, and it is well understood that Republicans have a two thirds majority in the state senate, which has yet to confirm this decision.

This has the earmark of an attempt to manipulate nationwide popular opinion, as in every election since 1964 Ohio State has been a perfect bellwether in predicting the outcome of presidential elections. Get Ohio on your side and you can convince the rest of working America that they should be too. Ohio voted overwhelmingly and surprisingly for Donald Trump in the 2016 election, with an 8% majority over Hilary Clinton.

From a renewables point of view the arguments are kind of irrelevant. If old plants get subsidized today, they can get un-subsidized tomorrow. In order for this Ohio decision to go through, the House must defy a number of clean energy requirements for utilities passed by legislators back in 2008, in particular the need to get 12.5% of its energy from renewables by 2027. It will cause furor and could potentially backlash on Trump.

Do customers who are under threat of losing their jobs really wish to be cut off from the renewables revolution, where jobs are the bulk of the expenditure instead of fuel, and to have increasing electricity prices, just to protect those jobs. It may buy precisely 4,000 votes, but that’s out of a total of around 5 million.

FirstEnergy Solutions has been threatening to shut the plants down without a subsidy, despite them being profitable already, although one is due an expensive refueling exercise.