A representative of an Ohio-based free-market think tank cautioned state lawmakers during a Wednesday committee hearing about adopting a measure that would subsidize two nuclear power plants that are no longer viable on their own.
“The Buckeye Institute opposes government subsidies, pure and simple,” institute Research Fellow Greg Lawson said in his testimony to the Energy and Natural Resources Subcommittee on Energy Generation. “Any subsidy given to one entity puts other competitors at a disadvantage. And using the power of government to disadvantage market competitors makes for bad public policy.”
House Bill 6, sponsored by state Reps. Jamie Callender, R-Concord Township, and Shane Wilkin, R-Hillsboro, is designed to boost the state’s investment in clean energy and incentivize the building and maintenance in facilities that produce few carbon emissions and reduce energy bills.
Critics of the bill have classified the legislation as a bailout aimed at saving two FirstEnergy Solutions nuclear power plants – the Davis-Besse and Perry plants. The company, which has lobbied for legislative help, has said that the plants will be shut down without financial aid from taxpayers.
If passed, the legislation would impose a $2.50 monthly fee for every residential customer, a $250 fee for industrial customers and a $2,500 fee for large users. This would generate about $170 million to keep the plants open.
Gov. Mike DeWine’s office expressed interest in protecting nuclear power, but would not comment on the specific legislation.
“Governor DeWine believes that any serious plan to address carbon and cleaner energy solutions must include nuclear because there is no way to reach targets in any significant way at this time without nuclear being part of the solution,” Dan Tierney, the governor’s press secretary, said in an email.
Lawson’s testimony criticized the subsidies further.
“Although described as incentives, the policies ... are classic examples of government subsidies being used to prop-up declining businesses…,” Lawson testified. “[The bill] deals more broadly than just FirstEnergy Solutions, leaving leftover funds for other utilities to draw down, but everyone understands that FirstEnergy Solutions, or whoever eventually buys the two nuclear power plants, will be the bill’s primary beneficiary.”
Lawson received some pushback from committee members. Rep. Dick Stein, R-Norwalk, a co-chair of the subcommittee, said that he understands Lawson’s position from a free market perspective, but defended subsidies in certain cases.
“Sometimes subsidies do have a true value to society,” Stein said.
Several other organizations testified in the committee hearing, touching on how the legislation would affect competition as well as jobs and workers.
Luke Harms, who testified on behalf of the Ohio Manufacturer’s Association, said that the legislation would put an unfair cost on industrial consumers for the purpose of propping up two nonviable plants. He called the legislation “anti-competitive” and “anti-consumer.”
Bill Siderewicz, who testified on behalf of Clean Energy Future, said that it is inconsistent to label the bill a clean energy bill because it replaces a cheaper form of clean energy with a more expensive form through a bailout and a regressive tax.
After Rep. Jon Cross, R-Kenton, pushed back and said it was not a bailout, but rather a tax credit.
Some testifiers, including Eric Meyer, speaking on behalf of Generation Atomic, spoke in favor of the legislation.
Meyer said that through a door-knocking campaign his group found that people are willing to pay a little extra money on their energy bills to protect the power plant jobs and clean air. He said the legislature should “do everything we have to do to save these plants.”