HB 6: A Story of Electricity, Public Health and Politics
Dr. Anita Somani
At our most recent CMA Board meeting, conversation turned to current political activity and specifically the media ads on HB 6 on nuclear energy subsidy and renewable energy.
From my perspective, it is frustrating that Ohio seems to be stuck in the past and does not recognize that the loss of clean energy impacts Ohioans health by increasing air pollution and the risk of increased rates of asthma, pulmonary disease, and other health issues.
Why is it smart to lower our state's standards in regards to solar and wind as renewable energy sources? Additionally, I think we need to consider that new companies are looking for alternative sources of energy. It might be the basis of good policy to focus on our state's future, rather than looking backwards at our past practices of producing energy. Progressive energy policy in this case would seem to me to be both good for the health of our citizens and also for our future economic development. I don't think that is what we got from passage of HB 6.
Below is some background from the CMA's public policy consultant on this issue to help explain the politics around all of this.
Malcolm Porter, CMA Public Policy Consultant:
While I am not a utility expert, here is some perspective on the bill and issues around it. This is a bill that did not follow into traditional political lines, with organizations like the Ohio Consumers Council and Ohio Manufactures Association joining forces to unsuccessfully oppose the bill; which while a bi-partisan coalition of legislators crossed party lines to give it a winning majority.
Background:
Ohio has 2 nuclear power plants, Davis-Besse and Perry. Both are owned by First Energy Solutions, which is operating under bankruptcy protection. The plants are slated to close by 2021.
1,440 people are employed at the plants
Nuclear power provides 12% of Ohio’s total electricity supply. This is largest source on non-carbon dioxide fuel generated electricity in the state.
Largely due to the discovery of shale gas, natural gas now provides 34% of the state’s electricity, up from less than 2% ten years ago
Renewable energy sources combine to produce 2.7% of Ohio’s electricity
Major Provisions of HB 6
Provide approximately $150 million annually to subsidize the nuclear plants
Provide $20 million to subsidize solar generation – anticipated to be for 6 separate projects in different parts of the state
Lowers existing requirements for increasing the amount of electric generation renewable energy sources to 8.5% of total electricity by 2026 and then removes the mandates after that time
Removes the current requirements that a portion of renewables come from solar
Reduces energy efficiency requirement provisions in current law
Overall monthly subsidy payments from consumer and large utility rate payers are lowered over the current subsidy rates
Controversy around this bill came from a number of perspectives:
Concern from environmental perspective that support is lowered for renewable energy programs
Concern from free market perspective that the government is subsidizing one source of power over other sources
Concerns about the economic and social impact to communities in NE Ohio from the closure of the plants
Concern from an economic development perspective that Ohio businesses will pay higher overall rates due to discouraging lower cost natural gas generated electricity options
The result of all of this was a very contentious policy and political fight. Key legislative stakeholder groups – utility companies, Ohio’s business community, consumer advocates, and environmental advocates have had strong positions on the bill. And legislators from the NE Ohio areas near the nuclear plants have strong perspectives as well. The mix of these various positions resulted in legislative voting patterns that did not fall along party lines.
While this bill was a challenge in its own right; it also was a contributing factor to the politics of the recently passed budget. It is no coincidence that the budget and HB 6 were moving through the legislature similar timeframes, as some legislators expanded their negotiating position for support of the budget, to include details connected to HB 6.
With the two year budget and HB 6 now enacted into law, the Legislature is expected to take a significant break and not return to Columbus until later this fall to deal with a myriad of remaining policy proposals that have been sidelined as these two behemoth legislative issues took up much of the recent political oxygen in the room.