New Ohio ‘bailout’ request shakes up nuclear/carbon debate, Midwestern Energy news, The growing debate over nuclear power’s role in curbing emissions is running headlong into an ongoing controversy over “bailouts” for Ohio’s largest utility.
FirstEnergy, which has previously sought support for noncompetitive power plants, is now asking Ohio lawmakers for “zero emission credits” for its aging nuclear plants. Environmental and consumer advocates say the plan is just another bid for more subsidies.
After FirstEnergy president and CEO Chuck Jones reported “excellent results in distribution and transmission service reliability and plant operations” during a February 22 earnings call with financial analysts, he said the company wants a zero-emission nuclear, or “ZEN,” program to support the company’s Davis-Besse and Perry nuclear generating plants in Ohio.
“The ZEN program is intended to give state lawmakers greater control and flexibility to preserve valuable nuclear generation,” Jones said. A bill to implement the program will be introduced soon, he said.
The Davis-Besse power plant in Oak Harbor and the Perry nuclear plant in North Perry are now valued at about $1.5 billion, including the value of their nuclear fuel. “The debt is significantly higher than that,” Jones noted. “Absent something to raise the value of these units and make them attractive to a buyer, there’s only one way for us to exit this business.”
Unless and until a sale occurs, though, the responsible party would be First Energy Solutions, or FES…….
The Public Utilities Commission of Ohio ruled last spring that it would allow extra charges to guarantee sales of all power from the Davis-Besse plant and certain coal plants. When federal regulators said they would require strict scrutiny of the deal, FirstEnergy dropped references to power purchases but still asked for the rider, which critics said would have cost ratepayers $4 billion. The company’s funding requests grew over the ensuing months.
Last fall the PUCO ruled that ratepayers would instead have to pay a “distribution modernization rider” of $200 million per year. Despite the name, the money collected is not for any specific grid projects. Instead, it’s supposed to boost FirstEnergy’s credit rating to make it easier for the company to borrow money as and when it eventually does any such work.
Back in the fall, FirstEnergy claimed the money would not be enough. Now the company is asking lawmakers for more………
“FirstEnergy’s two nuclear plants are old, and we are asking why Ohioans should be paying for a nuclear subsidy when other resources are less risky, less expensive and much better for the environment overall,” said Demeter at the Ohio Environmental Council.
“Not all zero-emissions sources are alike,” she stressed. “Nuclear energy carries with it a heavy toll when evaluating this resource cradle-to-grave.” In Demeter’s view, it makes much more economic sense to invest heavily in renewables, which avoid those risks.
“Once a wind turbine or solar panel is installed, there is no fuel that must be extracted from the ground, and there is no waste to deal with afterwards,” she noted. And combining them with innovative technologies like battery storage “will make renewables virtually unstoppable as the primary energy source we rely on in the near future.”
Demeter also distinguished FirstEnergy’s ZEN proposal from the state’s renewable portfolio standard.
“Ohio’s RPS is a market mechanism to ensure we’re maximizing clean energy opportunities in Ohio, and diversifying our energy portfolio in a responsible way,” she explained. “What FirstEnergy is asking for is a direct subsidy of two nuclear power plants that appear to be losing money in the regional energy markets.”
“The company is seeking ratepayer protection for these plants, but shareholders, not ratepayers, should be on the hook for the bet the company made on nuclear plants,” Demeter said. http://midwestenergynews.com/2017/03/02/new-ohio-bailout-request-shakes-up-nuclearcarbon-debate/
