In an age where renewable energy sources are supposed to be the future, older technology is not going down without a fight. For evidence, look at Ohio and West Virginia on a recent Tuesday.
In the Buckeye State, the General Assembly approved and the governor signed a law to rescue two nuclear power plants. The legislation gives $150 million a year through 2026 to the plants near Cleveland and Toledo in order to keep them operating. It also will scale back and eventually end requirements that utilities generate more power from wind and solar, according to The Associated Press.
To pay for the bailout, residential customers will have to pay 85 cents each month and major industrial plants will pay $2,400 on their electricity bills. While most of the money will go toward the nuclear plants, about $20 million annually will go to large-scale solar projects already approved, according to the AP.
Opponents led by the natural gas industry have vowed that they will ask voters to overturn the legislation in a statewide referendum next year, the AP reports.
Nuclear power is expensive and receives some protection in the power markets, but in recent years plants have been marked for shutdowns as they age. Few new ones are being built or planned in part because they are so expensive to build and operate.
Meanwhile, here in West Virginia, the Legislature approved a bill to exempt FirstEnergy Solutions' coal-fired Pleasants Power Station near Willow Island from a state business and occupation tax. The tax break is worth $12.5 million to the company. FirstEnergy CEO John W. Judge told lawmakers the plant would most likely close next year if it were not exempt from the tax. The closure would affect coal producers and other industries, also.
Pleasants operates as a merchant plant. Despite being in West Virginia, it had been part of FirstEnergy Corp.'s Ohio power supply. When Ohio deregulated its power market, electric utilities could no longer be guaranteed that they could pass on the costs of generating electricity from coal or other sources to their retail customers, so they are getting out of the power generation business for the most part.
FirstEnergy wanted to transfer Pleasants to West Virginia's regulated market, where it could be assured of a profit, just as it had done a few years earlier with the Harrison Power Station in Harrison County. The Public Service Commission approved the Mitchell transfer, but it rejected the Pleasants transfer. That put the Pleasants plant's future in jeopardy as it must now compete directly with lower-cost electricity from gas-fired plants.
As sources of electricity, coal and nuclear power are on their way out. At present, they cannot compete with natural gas and renewable sources. All legislators can do with tax cuts and bailouts is to buy them time.
Ohio lawmakers and regulators spent several months debating the need (or lack of need) to protect nuclear power in the modern market. In West Virginia, relief was proposed on Saturday and approved on Tuesday. That seems a little quick for such a complicated topic.
Ohio took the right approach in debating this topic for several months before bringing it to a vote. West Virginia's approach was questionable. FirstEnergy Solutions knew about Pleasants' problems months ago. It knew the long-term power auction, which could secure the plant's future or deny it, is coming next month. Yet no proposals were offered during the regular legislative session, and this one just approved was rushed through before the public could mount campaigns either in support or opposition.
That's no way to run a legislature unless you want to guarantee that the fix is in.