FirstEnergy nuclear subsidy would thwart Ohio shale gas, kill jobs says API Ohio

Davis-Besse nuclear power plant

FirstEnergy has asked Ohio lawmakers to create new regulations awarding "zero emission credits," or ZECs, to its nuclear power plants, Davis-Besse east of Toledo and Perry east of Cleveland, in recognition that they do not contribute to air pollution. The ZECs would increase customer bills by 5 percent, could not be avoided even by customers buying power from other companies and provide the company with an additional $328 million a year for up to 16 years. At the same time, FirstEnergy has not ruled out selling the power plants.

(Plain Dealer file )

CLEVELAND, Ohio -- The politically powerful American Petroleum Institute is opposing FirstEnergy's legislation raising power prices to subsidize its nuclear power plants because it's a threat to Ohio's shale gas development.

FirstEnergy wants to raise about $328 million a year for up to 16 years, for a total cost of $5.25 billion in additional charges, said API's top economist today. And at the same time the subsidy would take the steam out of Ohio shale gas development.

Chris Zeigler, API Ohio executive director, explained API's reasoning this way:

He said the subsidy would give FirstEnergy an unfair boost in regional wholesale markets where new gas turbine plants are now competing against nuclear and coal-fired power plants.

And that, he said, could put the brakes on the construction of about a dozen large gas turbine power plants that have been approved or are already being built in the state to use Ohio shale gas.

Those plants will have the capacity to generate 10,000 megawatts, or about 10 times the power that FirstEnergy's Davis-Besse nuclear power plant now produces.

"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," he said.

Erica Bowman, API chief economist, said the new 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 of gas a day. Ohio currently produces about 4.2 billion cubic feet of gas per day," she said.

And the state is capable of producing much more gas, if there is a demand for it, she added, leading to more jobs.

"We do not need to subsidize uneconomical nuclear generation facilities in Ohio for job creation. In fact by mandating such subsidies we could diminish job creating investment in Ohio's natural gas and drive away manufacturing as well, which is making a resurgence in the state due to low cost electricity."

Bowman was scheduled to address the Ohio House Public Utilities Committee this afternoon. She was among about 20 witnesses who had already submitted written testimony. Of the total, 13 witnesses were to speak in opposition.

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