COLUMBUS, Ohio—As state lawmakers start the process of repealing House Bill 6 following ex-House Speaker Larry Householder’s bribery scandal, most attention has been given to the law’s $1 billion-plus ratepayer bailout of two Northern Ohio nuclear power plants.
But there are a lot of other things HB 6 does in addition to the nuclear bailout, including offer subsidies to specific coal and solar plants around the state, dismantle the state’s green-energy standards for utilities, and allow FirstEnergy Corp. and other utilities to lock in a guaranteed level of ratepayer revenue for years to come.
HB6 has a grab-bag of other measures as well. It allows county fairs to halve their yearly electric bills, makes more mid-sized wind farms exempt from property taxes and puts them under local control, and requires Ohio to spend a larger portion of federal grant money for low-income heating assistance on home weatherization work instead of bill assistance.
Lawmakers will have to decide the fate of all of these elements.
Here’s more on the lesser-known parts of House Bill 6, including how the controversial law is already affecting you (and your bank account):
Expanded coal-plant subsidies: Starting last January, ratepayers around Ohio have been paying a fee of roughly 58 cents per bill for residential customers and 85 cents per 1,000 kilowatt-hour for commercial and industrial customers. All this money goes to subsidize two coal-fired power plants – the Kyger Creek plant in Ohio and the Clifty Creek plant in Indiana – run by the Ohio Valley Electric Corporation. OVEC is owned by three utilities: American Electric Power, Dayton Power & Light, and Duke Energy.
Both coal plants, which are each more than six decades old, often have to sell electricity at a loss since the military uranium enrichment plant they were built to power closed in 2001.
Ratepayers for the three utilities that own OVEC have already been paying money to subsidize the coal plants. What HB6 does is require FirstEnergy customers to also pay subsidies for the plants, even though their utility has no financial stake in OVEC.
Under the new law, these fees will remain in effect through the end of 2030, though the charges could continue beyond that, based on how much money is needed. HB6 technically caps these fees at $1.50 per month for residential ratepayers and $1,500 per month for commercial and industrial users – though utilities are allowed to charge more than that and collect the extra money at a later time.
Goodbye green-energy standards: House Bill 6 kills a 2008 law stating that by 2027, utilities must obtain 12.5 percent of their power from renewable sources such as wind and solar, as well as slash customers’ power usage by 22 percent through energy-efficiency programs.
HB 6 ends the state’s energy-efficiency mandate at the end of this year, meaning utilities no longer have to maintain programs which offer things like reduced-price LED bulbs, rebates on smart thermostats and energy-saving appliances, and financial incentives to build energy-efficient homes).
Utilities may still seek permission from state regulators to voluntarily continue efficiency programs, though it’s still unclear how many will do so and what those programs would look like.
The law also scales back Ohio’s renewable-energy goal, which until now stated that by 2027, utilities must obtain 12.5 percent of their power from renewable sources such as wind and solar. HB6 sets the maximum at 8.5 percent by 2026 – the level that, under the 2008 law, utilities had to reach by 2022.
HB6′s legislative supporters have argued that despite the new nuclear bailout surcharges, the legislation ends up lowering Ohioans’ electric bills by erasing the energy-efficiency and renewable-energy surcharges. But opponents point out that HB6 actually raises electric costs once you factor in the savings from the state’s energy-efficiency standards.
Decoupling: House Bill 6 allows Ohio-based utilities to lock in, with state regulators’ approval, a guaranteed yearly revenue from residential and commercial customers. It’s called “decoupling,” because the idea is to allow utilities to “decouple” the amount of money it makes from how much electricity they sell.
So far, only FirstEnergy Corp. has received state approval for an HB6 decoupling plan (AEP tried unsuccessfully to implement a decoupling plan with only commercial customers earlier this year).
Critics say HB6 allows FirstEnergy to charge ratepayers a total of $355 million more through 2024 in order to guarantee the company a yearly revenue of $978 million. ($978 million is how much FirstEnergy raised in 2018, a year in which FirstEnergy made more money than in other recent years thanks to hot weather and other factors).
House Bill 6 “essentially takes about one-third of our company and I think makes it somewhat recession-proof,” FirstEnergy CEO Chuck Jones said during a call with investors last year.
Eileen Mikkelsen, vice president of rates and regulatory affairs for FirstEnergy Service Company, said the decoupling provision provides customer safeguards, as it gives rebates to customers who pay more for their electricity in a given year than they did in 2018.
“This really does provide great stability and certainty, which is important to our customers,” Mikkelsen said.
It also allows FirstEnergy to shoulder the cost of the reduced demand for electricity from its energy-efficiency programs, Mikkelsen said. “We aren’t going to feel the financial strain of not collecting those dollars, which may inhibit our ability to provide safe and reliable electric service to our customers,” she said.
Solar-plant subsidies: Starting next January, House Bill 6 requires Ohioans to pay $20 million per year, or $9 per megawatt-hour, until 2028 to support the construction of six solar-power projects in Southern Ohio.
The six projects include: Hardin Solar Energy Facility, Hardin Solar Energy Facility II, Vinton Solar Energy Facility, Willowbrook Solar I, Hecate Energy Highland Solar Farm and Hillcrest Solar Farm. All have won approval from state regulators, though they’re in various stages of being built.
When completed, the six would be the first large-scale solar farms in the state, generating enough electricity to power almost 200,000 homes. The subsidies to the solar plants – at least one of which has politically connected backers – were added just before HB6 passed the Ohio House, allowing supporters to claim (accurately) that the bill helped renewable energy even though it scrapped the state’s green-energy subsidies.
Help for county fairs: County fairs have long had a problem regarding their electric bills. While county fairgrounds only require a minimal amount of power most of the year, the large amount of electricity they use during fair week means that they have to pay high monthly bills year-round.
HB6 requires utilities to set a fixed monthly fee or charge for county fairs, resulting in fairs’ electric bills being slashed by nearly half.
Rules for federal aid: HB6 makes changes to how Ohio spends the money it receives under the federal government’s Low Income Home Energy Assistance Program, which helps poorer Ohioans with their heating and cooling costs.
Under federal law, only up to 15% of the LIHEAP money a state gets can be used for home weatherization projects. House Bill 6, though, directs the state starting this fiscal year to request a waiver from the feds every year so it can spend 25% of its LIHEAP money on weatherization.
This change benefits weatherization groups that are hurt by the end of the energy-efficiency mandates. But it means more money will go to help homeowners instead of renters who have trouble paying their energy bills.
Changes to single-customer wind turbines: Unlike large-scale wind farms, which generate power for lots of energy users, some wind turbines are set up to provide electricity to a single facility (such as Honda’s transmission plant in Marysville). House Bill 6 changes state law in a way that can benefit the owners of these small-scale turbines.
Specifically, HB6 puts wind turbines that produce up to 20 MW of power for a single customer under the control of local authorities, rather than under state oversight. Previously, locals only had control over wind farms that generated a maximum of 5 megawatts.
In addition, energy projects of up to 20 MW are now exempt from local property taxes unless county commissioners vote otherwise (before HB6, the default exemption only applied to projects of 5 MW or less).
No property tax reassessment for nuclear plants: While House Bill 6 provides a bailout for Ohio’s Perry and Davis-Besse nuclear power plants, it also contains language that Energy Harbor, the owner of the plants, can’t seek a tax reassessment that would reduce the amount the company pays in property taxes. That’s important to local governments around the plants – particularly, local schools.
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