News and Analysis
The OMA Energy Committee will hit the road for its Aug. 29 meeting, convening in the Cleveland metro area. This is the perfect opportunity for members to gather information and weigh in on the latest energy developments affecting Ohio’s manufacturers. Rockwell Automation in Mayfield Heights will host the 10 a.m. to 1 p.m. meeting. A networking lunch will be included. As always, there is no charge to attend and the meeting is open to all OMA members. Register here or call (800) 662-4463. 8/1/2019
Last Sunday, July 21, Ohio House Speaker Larry Householder (R-Glenford) gave notice of a House session for Tuesday morning, July 23, to hold a vote on House Bill 6, the nuclear power plant bailout. After the Ohio Senate narrowly approved the measure late last week, the House needed to concur with Senate amendments to send it to Gov. Mike DeWine. The House voted to accept the Senate amendments with just 51 “yes” votes, one vote more than the minimum required.
Leading up to Tuesday’s vote, statewide media reported that a state aircraft had been scheduled to pick up lawmakers from a meeting in Chicago to ensue enough votes in favor of HB 6. The flight was later cancelled. 7/25/2019
Approximately two hours after the House passed HB 6, Gov. Mike DeWine signed the nuclear power bailout into law. The OMA, with the Office of the Ohio Consumers’ Counsel, had written the governor earlier to urge him to veto the legislation that will redistribute Ohioans’ monies to Wall Street hedge funds. The politically influential AARP also urged a veto. 7/25/2019
Aside from the obvious new charges that customers will be forced to pay to subsidize two nuclear facilities and two old coal power plants, HB 6 grants significant new authority to state officials to interfere in competitive power markets. Under HB 6, the Public Utilities Commission of Ohio (PUCO) will have sweeping new authority to determine new charges on customers’ power bills. The OMA Energy Group will be participating in upcoming rate making and rule making. All manufacturers are invited to join this effort to protect their interests.
Prior to the House vote earlier this week, the OMA dispatched an alert to House members detailing key reasons to oppose HB 6. While proponent lawmakers dismissed the concerns, investors have already warned they will abandon a planned $500 million expansion of a natural gas power plant in Troy due to the bailout legislation. Read the OMA’s myths-versus-facts document on HB 6. Join the discussion at the OMA Energy Committee meeting in Mayfield Heights, Aug. 29. 7/25/2019
The Ohio Constitution allows citizens to initiate a referendum at the ballot box to repeal bills enacted by the Ohio General Assembly. The process for initiating a referendum on HB 6 has already begun by one group calling itself Ohioans Against Corporate Bailouts. The OMA staff is evaluating the proposal. Should the signature collection effort succeed, the item would be added to the November 2020 ballot, which will feature the presidential race. Members of the OMA Government Affairs Committee will discuss this issue in some depth at the Aug. 22 meeting. 7/25/2019
Wednesday night, the Ohio Senate voted 19-12 to approve House Bill 6, legislation that will heavily subsidize Ohio’s two nuclear power plants, along with two coal-fired plants — one of which is in Indiana! The vote followed hours of rancorous debate and a KEY VOTE ALERT issued by the OMA, urging senators to vote no. Find out how your state senator voted.
In his floor speech, Senate Energy & Public Utilities Committee Chair Steve Wilson (R-Maineville) said that “the real winners of this legislation is the ratepayer.” Ratepayer groups, including the OMA, oppose HB 6 because it will require Ohio businesses and families to pay hundreds of millions of dollars in new charges annually, while distorting the energy marketplace — which has been delivering lower generation costs and innovation.
Others who spoke in support of the legislation included Sens. Theresa Gavarone, Sandra Williams, Dave Burke, John Eklund, Lou Terhar, and Minority Leader Kenny Yuko. Speaking against the bill were Sens. Joe Uecker, Cecil Thomas, and Bill Coley. Watch the Senate floor debate beginning at the 1:51:35 mark. 7/18/2019
The current version of House Bill 6 now returns to the House for a concurrence vote to approve the Senate amendments. The House had planned to concur Wednesday night, but instead adjourned around 8 p.m. — apparently because they lacked the votes to get the 50-vote majority needed to send it to the governor.
House Speaker Larry Householder may try again as early as July 25 to get final approval for the legislation. The OMA has issued a Key Vote Alert to all state representatives urging a “no” vote on the concurrence of HB 6.
After the House concurs, the bill will be presented to Gov. Mike DeWine, who has made statements that he favors efforts to protect the jobs at the power plants. The OMA joined forces with the Office of the Ohio Consumers’ Counsel in sending a letter to the governor, urging him to veto HB 6 to protect Ohio businesses and families.
Take some time over the next week to call your state representative (ideally on their mobile phone) to let them know you oppose HB 6 and urge them to do the same. Equally important, call or write your state senator to thank them if they voted no. 7/18/2019
During this week’s debate on HB 6, a floor amendment was added to delay the bill’s subsidy collections and payments to power plants by one year (until 2021). This raises further questions about the need for the bill. For weeks, nuke plant owners contended that customer funds were needed by July 17 to prevent the plants from decommissioning.
Others have questioned the wisdom of passing a “bailout” now, considering the state could wait for the FirstEnergy Solutions bankruptcy proceedings to be completed soon so that lawmakers would be able to see the real financial need, if any. The OMA’s profitability analysis finds that the nuke plants are in fact going to be profitable after bankruptcy.
Before advancing HB 6 to the full Senate, the Energy and Public Utilities Committee adopted several other amendments — some of which add financial protections for utilities at ratepayers’ expense, such as the new decoupling mechanism and OVEC revision. A provision was also inserted to allow mid-sized industrial customers to opt-out of paying the energy efficiency rider, but the benefit is fleeting since utility-managed energy efficiency programs will be discontinued under the bill. Also of interest was an added provision allowing mercantile customers to enter into power purchase agreements with distribution utility companies.
The OMA Energy Group will be reviewing all the Senate changes at their July meeting. 7/18/2019
Among the thousands of law changes made by the new state budget (HB 166) is a utility-friendly provision that allows FirstEnergy distribution utility companies to keep even more profit rather than return excessive earnings to customers. The House added the provision in its version of the budget, and the Senate retained the language. The OMA lobbied lawmakers in both chambers to remove the unfair provision. 7/18/2019
In energy — like all other sectors of the economy — the free marketplace works, if politicians allow it. That fact was proved again last month when Ohio’s wholesale electricity prices reached new lows before rebounding slightly.
According to analysis from OMA Connections Partner Scioto Energy, the decline started in June as forward prices dramatically dropped 10% and ended the month with a decline of 8%. The experts at Scioto Energy say this is a new era in wholesale electricity pricing for Ohio as the abundant natural gas in the shale reserves — along with expanded gas storage inventories — have “set the market for the steep decline to all-time lows, now trading an average of only $25 per MWh all the way out through 2024.” 7/15/2019