News and Analysis
Seventy-four opponents crammed into a tiny hearing room in the basement of the Statehouse this week to make the case against Substitute House Bill 6. Only two proponents appeared, and one was the bankrupt company that owns the uneconomical nuclear power plants, FirstEnergy Solutions.
The OMA was among the groups that filed testimony in opposition to the most current version of HB 6, which will cede more control to government bureaucrats in electricity pricing. The OMA testimony — delivered by Terri Sexton, Environmental & Energy Manager for Navistar — describes the numerous problems with the bill and provides precise examples of the bill’s impact on Navistar’s Springfield truck assembly plant. The OMA testimony characterizes the sub bill as “a mandated, customer-financed bailout of uneconomical power plants in the form of ‘clean air credits’ and direct subsidies.”
Opponents and proponents of House Bill 6 — the nuclear power bailout bill — are now doing battle on the public airwaves. The OMA opposes the bill, which is pending in the Ohio House.
This week, Americans for Prosperity started running a statewide radio ad on news/talk radio stations in opposition to the bailout bill. The group has said the measure would tax consumers through their monthly energy bills “in order to prop up politically favored companies.” The Ohio Consumer Power Alliance has also launched a radio ad campaign against the bill.
At the same time, Generation Now — a secretive political money group — is running a paid media campaign featuring both radio and TV spots, with more than $600,000 dedicated to broadcasting their pro-HB 6 message. This story by the Dayton Daily News examines the organization and its funding.
Also this week, Ohio State University economist Dr. Edward “Ned” Hill expressed strong opposition to HB 6 in his editorial published by Crain’s Cleveland Business. In his editorial, Dr. Hill wrote: “The bill will result in higher electricity generating and capacity charges for all Ohioans, deter investment in electricity generation not controlled by Ohio’s investor-owned utilities, lower the reliability of the state’s electric system and hurt economic development prospects.” 5/8/2019
Last week, Ohio House lawmakers unveiled a new version of the controversial nuclear bailout package. OMA experts have reviewed Sub HB 6 line-by-line and found it is not what its supporters claim. In general, the substitute version makes a series of changes aimed at protecting the profits of utilities at the expense of customers.
To help clear the confusion, read the “Ten Myths Surrounding Sub House Bill 6.” Interested OMA members will soon have another chance to get an in-depth HB 6 update and have their questions answered. Look for an email invite early next week to participate in a conference call. 5/9/2019
Mike Pandoli, owner of Berea Manufacturing — a welding shop outside Cleveland — read about the nuclear bailout legislation (HB 6) being considered in Columbus. He wrote a letter to the Speaker of the House to convey his concerns regarding the new customer charge applying to each meter in his plant. Click here to see what happened next. 5/6/2019
Just as in Ohio, lawmakers in Pennsylvania have been asked to pass legislation to bailout uneconomic nuclear power plants in the Keystone State. The Associated Press is reporting that a financial rescue is now off the table and unlikely to advance in the foreseeable future. Here is a fun, brief video that explains the issue. 5/9/2019
Answer: When you are FirstEnergy.
Undeterred by the massive bailout request pending in sub House Bill 6, lobbyists from the Akron-based utility were able to get a provision tucked into the state budget bill, House Bill 166.
Monopoly electric utility companies are heavily regulated by the Public Utilities Commission of Ohio (PUCO) in order to protect customers from price gouging. Under Ohio law, electric utility companies are entitled to enjoy just and reasonable profits. The law authorizes PUCO regulators to limit monopoly profits. The provision now contained in HB166 would allow FirstEnergy operating companies to keep “significantly excessive profits” rather than refund them to consumers.
The OMA provided testimony against the anti-consumer amendment and urged lawmakers to strip the proposed change. 5/8/2019
Unswayed by more than 100 individuals and organizations that have presented concerns with House Bill 6, the House Energy Generation Subcommittee this week voted to accept a substitute bill, advancing the controversial measure to the full Energy and Natural Resources Committee for a possible vote next week.
Last week, the OMA expressed opposition to HB 6. This week, members of the OMA Energy Committee and Government Affairs Committee participated in a special update and briefing on the bill.
OMA staff is still reviewing the House revisions to the massive biennial budget bill, House Bill 166. One glaring energy policy change in the House proposal would deny customer refunds for Ohio Edison’s significantly excessive profits, further eroding customer protections. This provision would be in addition to the hundreds of millions of dollars that FirstEnergy would obtain from customers under House Bill 6.
The EIA forecasts that renewables — which include wind, solar, and hydroelectric — will produce 18% of all U.S. electricity this year, and almost 20% in 2020. The EIA also predicts that wind generation will surpass hydroelectric generation to become the leading source of renewable generation in both years. Overall, natural gas is expected to continue its dominance as a fuel source for electricity production, accounting for 37% of all U.S. electricity generation this year and 38% in 2020.
In Ohio — the nation’s eighth largest net electricity producer — coal remains the largest fuel source at 47%, followed by natural gas at 35%, according to the EIA. Industrial sites account for roughly one-third of all Ohio’s electricity consumption. 5/1/2019
On Wednesday at the Ohio Statehouse, Whirlpool Corp.’s Senior Manager of Government Relations Luke Harms testified on behalf of the OMA at a hearing on House Bill 6 — legislation that would impose new charges on electric customers in order to subsidize uneconomic generation facilities. (Harms’ testimony begins at 36:19 of this video.)
The OMA opposes HB 6 and was one of 100 organizations or individuals testifying this week against the proposal. If passed and signed into law, the aggregate cost of HB 6 to Ohio customers is estimated to exceed $300 million per year, indefinitely.
In his testimony before the House Energy Generation Subcommittee, Harms told lawmakers HB 6 would create “multiple new costs and new forms of costs for manufacturers.” He also noted that the bill seemingly would penalize companies like his that are using renewable, on-site electrical generation.
Also appearing at Wednesday’s hearing on behalf of the OMA were OMA Energy Counsel Kim Bojko, partner at Carpenter Lipps & Leland LLP, and Anthony Smith, Global Energy Coordinator at Cooper Tire & Rubber Company.
Later in the day, Ohio State University economist Dr. Edward “Ned” Hill expressed strong opposition to the bill, calling it “crony capitalism.” In his testimony (beginning at 2:22:45 of this video), Hill told lawmakers that HB 6’s “subsidies without end” would be “fundamentally detrimental to the state’s economic development,” potentially deterring future private investment in Ohio’s generation market. 4/25/2019