Chris Zeigler and Erica Bowman Ohio Nuclear Bailout Press Call Opening Statement

Press call statement
API Ohio Executive Director Chris Zeigler
API Chief Economist Erica Bowman

Ohio Nuclear Subsidies

May 9, 2017

As prepared for delivery

Chris Zeigler:

Good Morning,

Thank you for joining today’s call. My name is Chris Zeigler and I am the executive director of API Ohio. This afternoon the Ohio House will be accepting testimony in opposition to House Bill 178, legislation that would provide bailouts to nuclear power companies at the expense of Ohioans.

Ohio has abundant reserves of clean-burning natural gas that has provided consumers and businesses in the state with affordable electricity and provided Ohio workers with countless jobs without government subsidies. In fact, more than 255 thousand jobs in the state are supported by the natural gas and oil industry and wholesale electricity prices in the state have dropped nearly 50 percent since 2008 thanks to competition in the electricity markets.

Unfortunately, the nuclear power industry in Ohio wants to distort the energy markets by pushing legislation that would force Ohioans to subsidize nuclear power plants that have become uncompetitive under current market conditions.

Instead of providing bailouts to uneconomic nuclear power plants, we should let the energy markets work to protect consumers. Despite what you hear from supporters of this legislation, and thanks to clean-burning natural gas, Ohio is experiencing cleaner air and historic reductions in emissions. Even if the Perry and Davis-Besse nuclear power plants were shuttered, Ohio would still meet its federal air quality requirements.

The fact is HB 178 would raise significant costs to consumers throughout the state.

This is contrast to what the U.S. energy renaissance has brought to consumers without government subsidies. According to reports, the average American household saved as much as $1,337 due to lower utility bills and other energy-related savings in 2015 and according to AAA, American drivers saved as much as $550 in transportation fuel costs.

Moving forward, it’s important to embrace this energy renaissance that has brought benefits to consumers throughout Ohio and not hurt it by picking winners and losers in the energy markets.

With that, I will turn it over to API’s Chief Economist Erica Bowman who will be testifying in opposition to H.B. 178 later today.

Erica Bowman:

Thanks, Chris.

API supports an all-of-the-above approach to energy that includes natural gas, nuclear, coal, wind and solar, provided that markets are allowed to be free of government mandates and subsidies, and do not unnecessarily burden consumers. We believe consumers benefit most when markets are allowed to flourish without mandates, riders and special treatment by lawmakers and regulators. 

Currently, over 10,000 MW of natural gas power plants are in various stages of development in Ohio, with a few slated to begin operations later this year.  These new, highly efficient power plants are a direct result of the shale gas revolution. Once they are all operational, these plants will use approximately 2 billion cubic feet (Bcf) of natural gas per day.  To put that into perspective, Ohio currently produces about 4.2 Bcf per day.  Thus, these plants would use nearly half of today’s production levels, driving up demand for natural gas and increasing direct and indirect job creation.  We do not need to subsidize uneconomical nuclear generation facilities to support job creation in Ohio.  In fact, by mandating such subsidies we could diminish job-creating investment in Ohio’s natural gas resources and drive away manufacturing as well, which is making a resurgence in the state due to low cost energy.

H.B. 178 calls for almost $300 per year in subsidies, funded by ratepayers, for 16 years at a total potential cost of over $5 billion. According to FirstEnergy, the Davis-Besse and Perry nuclear power plants employ 1,420 Ohioans. That’s a cost of over $200,000 per employee subsidized by ratepayers.

The subsidy provided by ratepayers in H.B. 178 would be in addition to over $200 million in rate increases per year that the public utilities commission just last year allowed FirstEnergy to levy on Ohioans throughout the state.

When do we say enough is enough? It’s time to put Ohio consumers first and reject bailouts for nuclear power companies.

H.B. 178 would skew the energy markets by propping up uncompetitive nuclear generation, increase costs for ratepayers including consumers and businesses, and deny Ohioans the economic and environmental benefits of natural gas.

Thanks for joining today’s call and we’ll now open the call up to any questions you may have.