Disastrous nuke bailout in Ohio offers cautionary tale for Pennsylvania lawmakers

Any Pennsylvanians who believe the hype surrounding a nuclear bailout should take a close look at what’s been going on in Ohio.

Just hours after bailout legislation (HB 6) was approved in Ohio in July, FirstEnergy Solutions (FES), one of the big drivers behind the nuke subsidy bills, torpedoed their union employees - a group the legislation was designed in part to protect. Now, the Ohio Attorney General is investigating tactics deployed by dark money groups that worked for the passage of the law. The allegations include payoffs and physical intimidation to block a referendum, which rescinds the bailout law, from getting on the ballot

“The corrupt practices and broken promises of the nuclear industry prove that a nuclear bailout is just another scheme to rip off the ratepayers,” said PMA President & CEO David N. Taylor. “The nuclear industry should be ashamed of its brazen, unethical, and dishonest dealings.”

While working through bankruptcy protection, FES spent over $10 million in lobbying, PR, and political donations to ram HB 6 through the Ohio Legislature. The law mandates the state’s 4.8 million utility customers pay a monthly subsidy to bailout aging nuclear power plants owned by FES and two coal-fired plants owned by the Ohio Valley Electricity Corp. The bailout adds up to more than $1 billion.

The same day the legislation was approved in late July, FES told a bankruptcy court that it intended to negotiate new bargaining agreements once it emerged as a reorganized company. It means that workers at their Perry Plant in Ohio and the Beaver Valley plant they own in Pennsylvania could lose their pensions.

Back in August, Ohio state Rep. David Leland, a Columbus Democrat, told Utility Dive that he questioned whether the bill would have passed if lawmakers knew the company would abandon its workers.

"This is so blatant,” Leland said. “This is like spitting in the face of every Ohio taxpayer. They are clearly more concerned about taking care of Wall Street than they are of taking care of workers at their plant. I think this is such a damaging piece of information that if this had been known before the vote, I don't know it would have passed.”

The group that fought the bailout legislation, Ohioans Against Corporate Bailouts, is now hustling to get a referendum on the ballot that would rescind the law. They need nearly 266,000 valid signatures by next Monday but are up against a dirty tricks campaign funded by dark money.

According to news reports, one of the dark money groups, Generation Now, hired FieldWorks, a grassroots strategy firm, to discourage voters from signing the pro-referendum petition. There have been reports of cash offers to pension circulators to change sides and aggressive tactics by “petition blockers.”

Ohio Attorney General Dave Yost has announced he is investigating both.

Another dark money group, Ohioans for Energy Security, is running TV ads making the absurd claim that the Chinese government is behind the effort to rescind the law. The group is also funding an alternative petition that opposes ‘foreign ownership of our electric grid.’

“They are coming for our energy jobs,” one video ad says. “The Chinese government is quietly invading our American electric grid. Don’t sign the petition allowing China to control Ohio’s power.”

Pennsylvania consumers and business have thus far held off against legislation forcing ratepayers to subsidize the four remaining nuke plants here, including FES’s Beaver Valley plant. But the fight is far from over.

In its latest tactic, FES praised Democratic Governor Tom Wolf earlier this month for his intent to unilaterally join Pennsylvania to the “Regional Greenhouse Gas Initiative.“

“This market-based approach to assigning a cost to carbon emissions in the Commonwealth will eventually play an important role in preserving existing non-emitting and low-emitting generation sources and accelerating the development of additional non-emitting sources,” FES said in a statement.

However, cap-and-trade tactics are the very anthesis of “market-based approaches.” And given what’s happened in Ohio and an ever-developing corruption story involving Exelon in Illinois, clean air has nothing to do with it. A bankrupt FES is trying to make its already profitable Beaver Valley plant even more attractive to a potential buyer. Guaranteed subsidies from ratepayers would accomplish just that.

FES and the other nuclear generators in Pennsylvania, Exelon and Talen Energy, were projected to make more than $600 million in profits from their Pennsylvania nuclear facilities in 2018 – unimaginably vast sums when electric generation in this state was deregulated 20 years ago. Then, the households and business paid nearly $9 billion in surcharges to transition nuclear power to a competitive market. Now they could be forced to shell out even more.

What’s even more disturbing is a recent analysis by PJM, the electric grid operator, shows that artificially keeping FirstEnergy’s nuclear plants open will cost taxpayers millions more in savings they would have received with more affordable generation coming online. That generation would find it nearly impossible to compete with an industry receiving a handout from the ratepayers.

Jobs and clean air have nothing to do with legislation forcing households and businesses to underwrite an industry that can no longer compete in the energy marketplace. What’s being uncovered in Ohio and what’s breaking in Illinois is proof.