Dive Brief:
- FirstEnergy Solutions (FES) on Wednesday filed a lawsuit with the Ohio Supreme Court to stop a proposed referendum on the state's recently passed nuclear bailout law from getting on next year's ballot.
- FES, the owner of Ohio's two nuclear power plants, argues in its lawsuit that the new monthly charge on all ratepayers in the state as part of the bailout legislation constitutes a tax, and as such it can't be overturned in a referendum.
- Ohioans Against Corporate Bailouts, the group trying to get the referendum on next year's ballot, said the FES' lawsuit is another "desperate attempt" to protect its "ill-gotten" billion dollar bailout, according to a recent statement.
Dive Insight:
When Ohio Gov. Mike DeWine, R, signed House Bill 6 into law on July 23, trade association Nuclear Energy Institute (NEI) called it a "smart investment" that will keep the majority of Ohio's clean energy generation in operation.
"Ohio's nuclear power plants do more than churn out 90% of the Buckeye state's clean power, they support 4,300 jobs and contribute $30 million per year to roads, schools and public services," Maria Korsnick, president and CEO of NEI, said at the time.
The legislation will bail out FES' two nuclear power plants in the state with an annual subsidy of $150 million from 2021 through 2026.
A group of consumers, businesses and environmental advocates, however, aims to overturn the controversial law in a referendum.
Anti-nuclear bailout group Ohioans Against Corporate Bailouts last week received the go ahead to start collecting petition signatures for a referendum after Ohio Attorney General Dave Yost approved the group's proposed ballot summary language.
The group will have to collect nearly 266,000 signatures by Oct. 21 to get the referendum on the November 2020 ballot. Gene Pierce, a spokesperson for Ohioans Against Corporate Bailouts, said that FES' lawsuit to stop the proposed referendum has no legal basis.
"Their own proponents in the legislature repeatedly stated that H.B. 6 was not a tax increase in their efforts to secure enough votes for passage of the bill," Pierce said in a statement.
But FES says the referendum could have a negative impact on consumers.
"If it is not stopped, the referendum would increase Ohioans' monthly electric bills, eliminate ninety percent of Ohio's carbon-free, zero-emissions electricity and cost Ohio 4,300 jobs," the utility said in an emailed statement to Utility Dive. "The referendum is inherently misleading and confusing to Ohio voters. Ohioans and the State of Ohio should be spared the costs associated with this futile attempt to place this unconstitutional referendum on the ballot."
Prior to the bailout law's enactment, FES said that without outside funding it would close its two Ohio-based nuclear reactors in 2020 and 2021, respectively. The company had already been preparing for post-shutdown operations as required by the Nuclear Regulatory Commission.
While the controversial law saved more than 4,000 jobs at the Davis-Besse and Perry nuclear power stations, critics claim that the $1 billion bailout is gutting Ohio's renewable energy standards.
HB 6 will lower the state's renewable energy mandate to 8.5% by 2026, down from 12.5%. However, the bill will also provide about $20 million a year to six utility scale solar projects that have already been approved by state regulators.
The money for the nuclear plants as well as the half dozen solar projects will come from a monthly surcharge of 85 cents for residential customers and up to $2,400 for large industrial operators. Another statewide fee will be added for the two coal plants.
NEI deferred all questions regarding the lawsuit to FES.
