Ohio Lawmakers Should Reject $ 610 Million/Year Electric Utility Bailouts

 

FOR IMMEDIATE RELEASE
June 9, 2017

MEDIA CONTACT
Jackie Stewart
(330) 720-3945

Ohio Lawmakers Should Reject $ 610 Million/Year Electric Utility Bailouts

Lordstown, OH – Ohio lawmakers are considering two unprecedented and unnecessary corporate bailouts for Ohio’s electric utility companies. Combined, the proposed Zero Emission Nuclear Resource Program (ZEN) H.B. 178 & S.B. 128 and the Ohio Valley Electric Corp. (OVEC) bailout H.B. 239 & S.B. 155 would total a whopping $610 million per year in corporate handouts to Ohio’s monopoly electric utilities.  If passed, Ohioans will have the added fees forced on them via increases in their monthly electric bills to subsidize two uneconomic nuclear plants and two antique coal plants, with one even being in Indiana. These new charges come along as Ohioans have already been charged over $14 billion in special fees, as reported by the AARP. Such unwarranted and dictated fees undercut current electricity shopping savings available through the State’s “Customer Choice” Plan, a clear violation of freedom to choose and save on electricity purchase. Poll after poll show that voters do not support utility bailouts by a margin of 7 to 1. If Legislators pass any of these utility bailout bills they will send a clear signal to the public that their voice is meaningless.

“Bailouts from the public (to subsidize losses from poor management decision making)  are being demanded, as these same Ohio utilities companies reap billions in profits and collectively distribute nearly $ 2 billion/year in cash dividends to their Wall St. stockholders.” said Bill Siderewicz, Clean Energy Future President. This is yet another blatant case of Main Street Ohio subsidizing Wall Street!!  “As a result of their aging and uneconomical plants, such bailouts via change in law will shift the burden of power generation losses to innocent bystanders, Ohio’s electric customers. Subsidizing these old, inefficient nuclear and coal plants create many major problems: (i) passes unwarranted costs onto the public that they don’t want (ii) destroys a free an open market for non-utility companies to continue investing Billions for new low-cost gas-fired plants in Ohio and (iii) adds unnecessary costs onto all Ohio businesses making them less competitive thus impeding their ability to grow and create new Ohio jobs.”

The proposed bailouts are Band-Aide solutions to save antiquated, money-losing power plants when an abundance of local shale gas has made Ohio a prime location and world leader for new, reliable, affordable non-utility natural gas-fired power plants. To date, the 10,200 MW of modern gas-fired private sector generation that has been built or is in advanced development in Ohio has resulted in $11 billion of new investment in Ohio. More importantly, new non-utility investment is already driving annual customer savings of $3 billion a year (according to a study by the Ohio State University) and creating thousands of jobs for Ohioans.

“When all of the facts are laid out, the choice should be clear. Why would the Legislature destabilize and destroy a functional free market economic system for electricity production in Ohio that : (i)  attracts Billions in new capital investments (ii)  lowers electricity prices for everyone (iii) provides new Ohio jobs and  (iv) improves air quality – logically they shouldn’t. It is illogical to toss consumer money, yet again, at businesses that simply can’t compete in Ohio’s open electricity generation market. Legislators in Columbus and all Ohioans need to reject these nuclear and coal corporate welfare bailouts.”

In H.B. 178 testimony, a summary statement by OSU’s Dr. Ned Hill rang a loud and clear consumer warning bell as to what motivates First Energy, AEP and DP&L in these change-in-law bailout efforts. Namely, Ohio’s utilities will:

“use the power of either the PUCO or the Ohio Legislature to mandate the purchase of expensive existing Ohio power plants first and to ensure that competitive market forces do not force them to either write-down . . . or to close the plants. Second, is to upend, circumvent and destroy the competitive electricity generating market . . “ in Ohio.

If the Legislature were to pass either of these bailout bills, they would be feeding into the very plan of Ohio’s electric utilities that Dr. Hill warned of.

Ohio lawmakers are also putting the environment at risk with these bailouts.  In August 2016, the Energy Information Administration credited “natural gas displacing a large amount of coal used for electricity generation” as the reason U.S. CO2 emissions are at levels we haven’t seen since 1991.

“Natural gas-fired power generation is a win-win on all fronts. It’s good for Ohio’s economy, consumer savings, Ohio job creation, added tax revenue and the environment. However, the private investments that Clean Energy Future and other non-utility companies have made in Ohio, that’s driving these new projects, won’t come if the State should proceed with passing bailout laws that saddle consumers with a proposed $ 260 million/year coal bailout and a $350 million/year nuclear bailout.” This collective $ 610 million/year bailout scheme is nothing more than a thinly veiled added Ohio tax that is nearly identical to the tax dollar amount imbedded in the 0.5 % increase in State Sales Tax that the Legislature has already REJECTED this spring. Common sense suggests the equal sized Utility Bailout Taxes should also be REJECTED by the Legislature.”

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Clean Energy Future, LLC (CEF) is a privately owned company dedicated to the development, construction, long-term operation, and financing of new, low-cost, gas-fired electricity generation facilities. CEF is an Independent Power Production (IPP) entity that is not a regulated monopoly utility such as AEP Ohio, DP&L, and FirstEnergy. By their very nature, IPPs must compete daily to provide the most economic, reliable and low-cost electricity. IPP’s core function is to protect the ratepayer from any negative consequences due to changing market conditions or decisions by management.

A PDF version of this press release is available here.

Clean Energy Future in Ohio

CEF’s management has a 17 year history of successful participation the Ohio open market gas-fired, wholesale electricity generation business. By the end of 2017, CEF will have provided $4.5 Billion of new private sector investment in Ohio, to produce low-cost electricity.

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