While much of the first six-plus months of this new two-year session of the Ohio General Assembly was spent fashioning, fighting over, and ultimately passing the transportation budget, operating budget, and workers’ compensation budget, one other issue also commanded a significant amount of legislative attention – not to mention news headlines. That issue was, of course, House Bill 6.
First introduced in April, HB 6 was signed into law yesterday by Gov. Mike DeWine, shortly after the House voted 51-38 to accept changes to the bill made previously by the Senate.
The primary purpose of the legislation is to assist FirstEnergy Solutions (FES) in keeping its two Ohio nuclear power plants operational. Absent financial subsidies, these two plants, the Davis-Besse Nuclear Power Station in Oak Harbor and the Perry Nuclear Power Station in Perry, would be deactivated and permanently cease operations on June 1, 2020 and June 1, 2021, respectively.
The bill requires Ohio’s four electric utilities to collect a monthly charge from all of its electric customers that collectively will generate $170 million annually, $150 million of which is earmarked for the nuclear plants to keep their reactors in service. The remaining $20 million will be put in a new Renewable Generation Fund and will be available to the operator of six specific in-state solar projects.
Residential customers will pay a monthly charge on their electric bills of $0.85, while the 147 largest industrial customers will pay $2,400 per month. For all other nonresidential customers, the exact monthly cost will be somewhere in between these two amounts but it is not stipulated in the bill. Instead, the Public Utilities Commission of Ohio is tasked with designing a rate scale that avoids abrupt or excessive bill impacts to all these customers.
Though not originally part of HB 6, the final version of the bill also provides assistance to three Ohio utilities that co-own two coal-fired power plants run by the Ohio Valley Electric Corporation (OVEC). They will be permitted to collect an additional $50 million per year from Ohio ratepayers through 2030 to subsidize these two plants. These monthly charges will be $1.50 for residential customers and $1,500 for all other customer classes.
While the primary goal of HB 6 was to preserve the nuclear plants, lawmakers also wanted to be able to do so without forcing ratepayers’ bills to rise. To offset the new charges listed above, HB 6 makes significant changes to the state’s existing renewable and energy efficiency mandates, resulting in projected net reductions for all ratepayers.
When the bill was originally introduced, the Ohio Chamber testified as an interested party, reminding lawmakers of our longstanding support of reforms to the state’s energy efficiency mandates and noting that, while HB 6 looks nothing like the mandate reforms we advocated for, it nonetheless addressed the concerns our members have with the escalating costs of the energy efficiency program.
Our testimony also noted that HB 6 contained an important component that is lacking in other states that have enacted similar proposals: caps on the costs that customers pay to preserve in-state nuclear generation capacity.
We further identified several areas of the bill that could potentially be improved, including the need to: devise a structure to address how businesses that have multiple meters at a single location would be billed, permit “mercantile” customers to opt-out of the energy efficiency programs, incorporate a sunset date for the new program, and remove the bill’s provisions pertaining to E-Check.
Though the Ohio Chamber remained an interested party throughout the legislative debate, the final version of HB 6 includes all of the changes for which we advocated. We are especially pleased that the legislature finally took action on providing needed relief from the escalating costs of Ohio’s energy efficiency mandates after years of debate. It is also our understanding that most – if not all – Ohio Chamber members, once the legislation is fully effective, will see reductions in their electric bills due to HB 6. Nonetheless, we know that many Ohio Chamber members still do not support HB 6’s broader goals.
Several million dollars were spent on direct mail, radio, digital and television ads trying to influence lawmakers and the broader public to support or oppose HB 6. And the fight over HB 6 may not yet be over. Just hours after Gov. DeWine signed the bill into law, opponents of HB 6 established a new group, Ohioans Against Corporate Bailouts, and are expected to pursue a statewide referendum to overturn the measure. They would need to file petitions containing the valid signatures of 265,774 registered voters by October 21 to prevent the law from going into effect, after which it would be submitted to the voters for approval or rejection during the November 2020 General Election.