Ohio House to vote on bill to save nuclear power plants

OVEC’s owners include American Electric Power Co Inc, Duke Energy Corp, FirstEnergy, AES Corp, PPL Corp and CenterPoint Energy Inc, according …

(Reuters) – The Ohio House of Representatives is scheduled to vote on a controversial bill on Wednesday that would cost power consumers about $190 million per year to save the state’s two nuclear power reactors from early retirement.

The two reactors at the Davis Besse and Perry power plants on Lake Erie are owned by Ohio energy company FirstEnergy Inc’s bankrupt FirstEnergy Solutions subsidiary.

FirstEnergy Solutions said it will shut the money-losing reactors in 2020 and 2021 unless they receive financial support from state or federal programs, which would result in the loss of an estimated 4,300 jobs.

Cheap and ample gas from shale fields like the Marcellus and Utica in Ohio has depressed electricity prices across the country over the past several years, making it uneconomical for generators to keep operating some nuclear and coal-fired power plants.

The American Petroleum Institute (API), a trade group for the oil and natural gas industry opposed to nuclear subsidies, released a report on Tuesday showing the reactors would be profitable over the 2019 to 2028 period.

“Absent any unknown need for major investments or repairs at these units, there is no reason for the Ohio nuclear units to retire as they are profitable on an operating basis including yearly capital expenditures,” API said in the report.

Officials at FirstEnergy Solutions called API’s release of the report the night before the scheduled vote on House Bill 6 “a last-minute, desperate attempt to use misinformation to mislead Ohio legislators” and said the report’s “calculation of profitability is deeply flawed.”

Analysts at Height Capital Markets in Washington DC said the API report could give some gas-friendly Republican House members cover to vote against the bill, which would provide FirstEnergy Solutions reactors with about $150 million a year from 2020 to 2026.

The bill would also provide financial support for Ohio Valley Electric Corp’s (OVEC) two coal plants, Kyger Creek in Ohio and Clifty Creek in Indiana.

OVEC’s owners include American Electric Power Co Inc, Duke Energy Corp, FirstEnergy, AES Corp, PPL Corp and CenterPoint Energy Inc, according to the company’s website.

If the House does vote on the bill on Wednesday, Height Capital Markets analysts said they believe Larry Householder, the pro-nuclear Republican Speaker of the House, will have to reopen negotiations with fellow Republicans to reach the 50-vote threshold needed to pass the bill.

(Reporting by Scott DiSavino; Editing by Andrea Ricci)

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