NewsGovernmentState GovernmentOhio State Government News


Ohio GOP lawmakers favor remake of tainted energy bill

Posted at 3:22 PM, Oct 19, 2020
and last updated 2020-10-19 15:22:47-04

COLUMBUS, Ohio (AP) — There has been limited progress made by Ohio lawmakers who lined up to repeal and possibly replace a tainted $1 billion bailout for two nuclear plants more than two months ago, increasing the likelihood that around 90% of electric customers in the state will see charges for the bailout next year.

Customers would also find themselves paying to subsidize utility-scale solar projects that have not yet begun to produce electricity. That subsidy, like the one for the nuclear plants, is supposed to be paid based on the amount of power generated.

Bills to repeal legislation officially titled Ohio Clean Air Program but better known as HB6 were introduced in August, soon after federal authorities announced the nuclear bailout was tied to a $60 million bribery scheme overseen by the House speaker.

HB6 has been under intense scrutiny since U.S. Attorney David DeVillers announced on July 21 that House Speaker Larry Householder and four others had been arrested for their involvement in a bribery scheme secretly funded by an unidentified company that clearly was Akron-based FirstEnergy Corp. Authorities have described it as the biggest bribery scheme in state history.

Republicans, the majority party in both legislative chambers, say hearings will resume after the Nov. 3 election with an apparent consensus that a replacement bill should maintain nearly all of HB6′s provisions but include strict auditing requirements to determine whether the nuclear plants’ owner needs the money before subsidies are paid.

Democrats argued for that requirement before HB6 was approved with little support from party members last July. The version that became law a year ago calls for annual reviews conducted by the Public Utilities Commission of Ohio after subsidies are paid.

A FirstEnergy subsidiary operated the plants until February, when a new privately held company called Energy Harbor took ownership in a deal struck in bankruptcy court. Questions about whether Energy Harbor needs the bailout money arose earlier this year after Energy Harbor received permission to buy back $800 million of its stock, which indicates strong financial health.

Householder was removed as speaker at the end of July. All five men were indicted on federal racketeering charges and have pleaded not guilty. FirstEnergy CEO Chuck Jones has said the company committed no wrongdoing.

Rep. James Hoops, a Republican from Napoleon, chairs the House committee considering next steps regarding HB6.

“Republicans, like Democrats, are disappointed all of this occurred,” Hoops said of the bribery scandal. “It’s a black eye on the legislative process because of one person. It doesn’t mean this was bad legislation. Now we have to figure out as we move forward what’s best for the state of Ohio and its energy policy.”

Rep. David Leland, a Democrat from Columbus, said HB6 needs to be replaced before discussions on future energy policy in the state move forward.

“The only way we send a message to the people of Ohio that Ohio is not for sale is to fully repeal HB6,” Leland said.

The Legislature missed an Oct. 1 deadline to repeal the legislation and prevent charges from being added to electric bills for around 90% of Ohio customers starting in January. The current bill allows the plants’ new owner, Energy Harbor, to receive as much as $150 million a year based the amount of electricity the plants generate.

The Legislature could repeal HB6 in an emergency measure before year’s end, preventing the charge from being added to customers’ bills, although it appears unlikely as Republicans consider how to proceed.

Meanwhile, Ohio Attorney General Dave Yost filed a lawsuit to stop the subsidy from being collected.

“We’re just trying to get our arms around if we do things here how it affects energy policy,” Hoops said. “We’re going to be more transparent and deliberate and make sure everyone understands what the implications are.”

Through the first nine months of 2020, the nuclear plant have accumulated $120 million in credits based on production reports submitted to the Ohio Air Quality Development Authority, which is responsible for administering subsidy payments. Credits of around $36 million for the first three months of 2020 are due to be paid to Energy Harbor next April if HB6 is not repealed.

Nearly 12% of the monthly charge — 85 cents for residential customers and up to $2,400 for commercial and industrial customers — will be deposited in a fund to provide as much as $20 million in total subsidies for five large solar projects that are not yet operational.

Some legislators, including Hoops, said they were unaware the solar projects were not yet producing power when they voted for HB6. Owners of the solar projects won’t be paid until the installations are operational, but money will continue to accumulate as long as the customer charge is collected. Excess money in the nuclear and solar plant funds will be returned to customers when the subsidies expire after 2026, according to HB6.

Owners of only three of the five eligible solar projects met a Feb. 1 deadline to submit applications to the air quality agency to eventually receive subsidies. Rep. Bill Seitz, a Cincinnati Republican, said a replacement bill should give the late-filing projects a second chance to apply.

Rep. Laura Lanese, a Grove City Republican, said she was frustrated by the slow walk on the repeal bill by her Republican colleagues. She wants HB6 repealed before year’s end.

“A straight repeal will do nothing but put us back to where we were,” Lanese said. “It’s not that complicated.”

Like Hoops, she said enacting a comprehensive energy policy and strategies for Ohio will take time.

“The number one question during all of HB6 was did the nuclear power plants even need the help?” Lanese said.

That question of need has been repeatedly raised by lawmakers after Energy Harbor received permission from the Federal Energy Regulatory Commission this year to buy back $800 million of its stock.

Rep. Stephen Hambley, a Republican from Brunswick who voted for HB6, said he decided shortly after the bill was approved that he would not seek reelection to a fourth term this year, citing his frustration with the difficulties of creating good policies at the Statehouse.

“In retrospect, that bill ought to be repealed,” Hambley said. “There’s a whole lot wrong with it.”