The monthslong struggle of Ohio lawmakers to repeal the customer-paid $1 billion nuclear power plant bailout they created for a FirstEnergy Corp. subsidiary in 2019 is coming to an end, possibly this week, though not with a simple repeal of the original legislation.

Ohio Senate President Matt Huffman (R) and House Speaker Bob Cupp (R) say they anticipate approval of final legislation soon.

More than half a dozen divergent and competing bills have been offered since the first of the year in the House of Representatives and the Senate. At least three bills that would outright repeal everything in the original legislation — House Bill 6 — have languished in committees. Bills eliminating both the nuclear and solar subsidies, or just the nuclear subsidy, have been approved by one chamber or the other.

But there has been no bill approved, or offered, that would eliminate subsidies to two aging coal-fired power plants that somehow got into the Ohio Clean Air Program that H.B. 6 was to have created. Because H.B. 6 was crafted to win support from disparate groups, leadership’s concern has been that a simple repeal might not be able to gain support from a majority in each chamber.

Federal investigators have alleged that FirstEnergy spent $61 million in bribes to elect officials that would pass H.B. 6. (See Feds: FE Paid $61M in Bribes to Win Nuke Subsidy.)

Change in Tune

Because the nuclear subsidy was at the heart of H.B. 6 — and Energy Harbor, the company that emerged from the two-year bankruptcy case of FirstEnergy’s power plant subsidiary FirstEnergy Solutions, would potentially make less money in the PJM wholesale market if a state subsidy remains in state law — lawmakers are trying to eliminate it first.

S.B 44, introduced Feb. 9 by Sens. Jerry Cirino (R) and Michael Rulli (R), would eliminate customer charges to finance the $1 billion subsidy for Energy Harbor. The bill won unanimous approval of the Senate on March 3. Both Cirino and Rulli are from Northeast Ohio, where the Perry nuclear plant is located.

As a county commissioner, Cirino said he fought for federal and state subsidies to keep the Perry plant open and its jobs intact. He said he accompanied company executives as they appealed to the Trump White House, as well as the Department of Energy and FERC.

Now Cirino says he does not believe Energy Harbor needs the subsidy. He added that he thinks the “federal situation” for nuclear operators is changing, referencing FERC’s expansion of PJM’s minimum offer price rule.

“After the election the federal situation had been changing, and Energy Harbor was of the view that they cannot accept state subsidies and get consideration for clean energy from PJM when they are doing the [capacity] auction,” he said in an interview. “They basically said ‘We don’t want it.’”

Neither the House Public Utilities Committee nor the Senate Energy and Public Utilities Committee have listened to public testimony directly from Energy Harbor about its need for the subsidy or desire not to receive it.

Ohio Consumers’ Counsel Bruce Weston has suggested they do so.

“It is said that Energy Harbor apparently wants its billion-dollar power plant subsidy repealed,” lobbyist Jeff Jacobson said on Weston’s behalf in testimony to the House committee on March 2. “The Ohio public, and this committee, should hear directly from Energy Harbor on this subject, under oath, in the light of day. …

“The public should have the benefit of a legislative investigation … [that] should include answers about whether the legislature and the public were misled by FirstEnergy, Energy Harbor and others,” he said.

Energy Harbor is spending money on the plant. The company is preparing now to refuel the reactor, slowly coasting to a lower output in preparation for a refueling shutdown, according to Nuclear Regulatory Commission records. The company has informed the commission that it intends to seek an extension of the Perry plant’s nuclear operating license, which expires March 18, 2026, NRC records show.

Energy Harbor’s spokesman has not returned phone calls and text messages seeking comment about its position on the state subsidy.

Solar Uncertainty

Meanwhile, Reps. Dick Stein (R) and James Hoops (R) introduced H.B. 128 on Feb. 17 to outright eliminate the nuclear subsidy — as well as the solar subsidies that were included H.B. 6 to sweeten the deal.

The two lawmakers represent counties in Northwest Ohio, home to the Davis-Besse nuclear plant, which is an important source of high-paying jobs for the region. But residents in those counties are also upset about a surge of applications from developers who want to build utility-scale solar installations.

H.B. 128 would eliminate both the seven-year $150 million annual nuclear subsidy for Energy Harbor and the $20 million annual solar subsidy authorized in H.B. 6 for a half dozen previously approved utility-scale solar farms, some of which are now being built. The bill is scheduled for a third hearing and possible vote Tuesday before the House Public Utilities Committee.

The Davis-Besse nuclear plant in northern Ohio | NRC

“I anticipate House Bill 128 will be voted out of the House Public Utilities committee this coming week and to be scheduled for vote of the full House vote shortly thereafter,” Speaker Cupp said through his spokeswoman in response to a question from RTO Insider.

Both the House and Senate are meeting Wednesday. Whether S.B. 44 and H.B. 128 could be quickly combined is another question. Senate President Huffman partially addressed how to meld the bills in brief remarks before a reporters’ gaggle after a Senate session last week.

“We have not actually sat down with the House and said, ‘Let’s do it this way or that way.’ There are a few other efforts we are working on with the House in a little bit more formal way,” he said.

“I was part of the discussions in the last month or so in the last [General Assembly]. And there were general discussions with Speaker Cupp at that time about things that collectively the House and the Senate could get enough votes to pass, and those are the first two things that we have done, in Senate Bill 44 and Senate Bill 10,” he said.

Huffman was referring to a second unanimously approved Senate bill introduced by Sen. Mark Romanchuk (R). S.B. 10 would eliminate the “decoupling” mechanism H.B. 6 created for FirstEnergy, guaranteeing that the company’s ongoing annual revenues would not be lower than its rosy 2018 revenues rather than reflect any future downturns. The concept of decoupling had been introduced when the state ordered utilities to initiate energy efficiency programs designed to cut customer demand — and potentially profits.

FirstEnergy’s then-CEO Charles Jones noted at the start of the COVID-19 pandemic that the decoupling provision had made the company “recession proof.”

Approved by the Senate on Feb. 17, S.B. 10 was crafted to prevent any utility from putting such a mechanism in place in the future.

Romanchuk appeared before the House Public Utilities Committee on Feb. 23 to introduce the legislation. He noted in his testimony that under H.B. 6, FirstEnergy would receive at least $978 million in distribution revenues annually, regardless of consumer demand. The committee has not yet held a second hearing as it has concentrated on taking testimony on H.B. 128.

Huffman said he sees significant support for both S.B. 44 and S.B. 10.

“I think those are supported by a significant majority. They were passed unanimously out of the Senate. So, we can deal with those two significant problems,” Huffman told reporters. “It was my thought that we needed to do things that we could get done. I think people are satisfied with those. That certainly does not mean it is the end of the discussion.”

He cited possible legislation to recreate energy efficiency programs as an example. “We had a bill regarding the energy efficiency program introduced by Sen. [Matt] Dolan [R]. He is obviously a supporter of that. We are going to keep having conversations.”

Huffman could not be specific as to when or how the bills would be combined, approved by both chambers and sent to Gov. Mike DeWine (R).

Another Northwest Ohioan, Sen. Rob McColley (R), recently tried to address the negative impact that H.B. 6 has had on the public’s perception of Ohio and its state government.

“We have had to deal with an awful lot regarding these provisions,” he said of H.B. 6, in remarks before the Senate unanimously approved S.B. 44. “It’s been something that has … placed a black eye … on our institution. We need this as a learning opportunity … as a teachable moment for ourselves and even for those who will come after us.

“To realize that when we are passing legislation, we need to look at it in the context of what is best for the citizens of Ohio. [S.B. 44] is something that will undo an awful lot of damage that has been done, not just to our institution, but to the state of Ohio. We all need to support this bill.”

FirstEnergy Names New CEO

On Monday, FirstEnergy appointed Steven Strah as CEO and a member of its board of directors, effective immediately.

Strah has served as acting CEO since October 2020, when the company fired Jones over the bribery investigation. Strah will continue as president of the company, a position he has held since May 2020. His base annual salary was set at $1.1 million.