Ohio advocates and lawmakers set sights on repealing subsidies for coal plants

In 2019, Ohio lawmakers passed House Bill 6, a sweeping energy law that created subsidies to bailout nuclear power plants and strengthened existing subsidies for coal plants owned by the energy company consortium known as the Ohio Valley Electric Corporation or OVEC.

The subsidies go to two coal plants: Kyger Creek in Gallia County and Clifty Creek in Madison, Indiana.

The subsidies were first approved by the Public Utilities Commission of Ohio. The language in HB 6 strengthened the subsidies by putting them into Ohio law, allowing the charge to appear on all ratepayer bills and allowing the subsidies to continue for 10 years.

Neil Waggoner with the Sierra Club's "Beyond Coal Campaign" says these subsidies put ratepayers on the hook to prop up struggling coal plants.

"The reality is these plants have cost customers every single day since the [OVEC] bailout was first started by the public utilities commission. There has been no financial benefit to customers whatsoever," Waggoner said.

He adds that OVEC could keep the plants going, but the subsidies allow energy companies to avoid dipping into their own profits.

OVEC executives appeared before a Senate committee in June 2021 to testify against a bill that would repeal the coal plant subsidies provisions created through HB 6.

Amy Spiller with Duke Energy, part owner of the coal plants, told the committee, "In many respects is like an insurance policy to mitigate or offset the risk of unknown, unpredictable, unexpected costs."

House Speaker Bob Cupp (R-Lima) was asked if the Ohio House would eliminate the OVEC rider. Cupp noted that the OVEC structure is unique since it's a collection of energy companies that entered into an agreement to provide power to a uranium enrichment plant in Piketon in the 1950s.

"But it is a cost to the utility. They can't get out of it. And it appeared to be reasonable at the time they entered into it. So it's a much more complicated issue than just saying we’re supporting a coal plant in Ohio and Indiana," Cupp said.

Watch: Full interview with House Speaker Bob Cupp here.

Cupp adds that ratepayers in other states are also providing a financial boost for the plants.

However, Michigan utility regulators issued a notice in November 2021 that they are unlikely to approve similar ratepayer costs in their state for OVEC plants.

"The Michigan share of these excess costs are unlikely to be permitted without additional evidence that continuing to purchase power from the units was in the best interest of its customers," stated a press release from the Michigan Public Service Commission.

Bipartisan bills to repeal the OVEC subsidies are sitting in the Ohio House and Ohio Senate.

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