Developer Blasts Ohio Nuclear Deal, Pulls Plug on Gas Plant Project
Credit to Author: Darrell Proctor| Date: Wed, 21 Aug 2019 17:59:37 +0000
The president of a company developing two new natural gas-fired power plants in Ohio said he is ending a project for a third plant there after lawmakers passed legislation to help two struggling nuclear generation facilities in the state.
Bill Siderewicz, who leads Massachusetts-based Clean Energy Future LLC, on August 20 in a statement said the passage of House Bill 6 (HB 6) is “political tampering with Ohio’s free electricity generation markets,” and said it would hurt investment in new power generation projects in the state.
Ohio Gov. Mike DeWine, a Republican, signed the bill into law July 23. The legislation, supported mostly by the state’s GOP lawmakers, earmarks $150 million annually through 2026 to provide financial help to FirstEnergy Solutions’ (FES) 908-MW Davis-Besse nuclear plant near Toledo, and FES’s 1,268-MW Perry plant northeast of Cleveland. The new law also scales back and eventually ends requirements for utilities to generate more solar and wind power in the state.
FES had said it would close the nuclear plants over the next two years absent financial support. The company earlier this month said it would close the coal-fired Bruce Mansfield plant in Pennsylvania in November, two years ahead of schedule.
Law Also Will Help Coal Plant
FES on July 26, just days after the new law was signed, also said it was canceling its plan to close the W.H. Sammis coal-fired power plant in eastern Ohio. FES had said it would close the 2,200-MW plant at Stratton, near the Pennsylvania border, in 2022, but said the money to support the nuclear plants also would allow it to continue operating Sammis.
FES CEO John Judge, speaking at a public forum in Steubenville, Ohio, in June, prior to the passage of the legislation, said, “House Bill 6 is really designed to help our nuclear plants and all the money from that that came to us would go to those nuclear plants, but at the same time it would make our company economically healthy enough that we would be able to look at other investments like investing in the Sammis plant.”
FES filed for bankruptcy in March 2018. The company had earlier said it would close both nuclear plants, which have been uneconomic for several years, by the end of 2021 unless Ohio officials provided financial assistance to keep the plants in operation. Four other states—New York, New Jersey, Illinois, and Connecticut—also in recent years enacted programs to subsidize nuclear power generation.
Clean Energy Future developed the 940-MW natural gas-fired Lordstown Energy Center, which entered commercial operation last year, and also is set to begin construction this year on the nearby gas-fired Trumbull Energy Center. Siderewicz on Tuesday said his group would end its plan for a third plant in that area, called Lordstown-3, though he said almost $1 million has already been spent on development and permitting for the facility.
“Over the past six years, I have come to know and appreciate the strong will and moral fiber of those who call the [Mahoning] Valley home, and today I find it deeply painful not to be able to help boost the region’s growth due to political forces that exist in Columbus,” Siderewicz said in the release. “Political tampering with Ohio’s free electricity generation markets has very real impacts and results, as we see happening now.” Siderewicz said the project would have created about 1,100 union construction jobs, with a $29 billion economic impact to the Mahoning Valley region over the next 50 years.
General Motors earlier this year closed a production plant in Lordstown, putting 1,700 employees out of work. The plant had downsized in recent years; it had as many as 4,500 workers as recently as 2016.
Law Cuts Mandates for Renewables
Supporters of HB 6 said the nuclear plants account for nearly all of Ohio’s clean power generation. The two plants employ about 1,400 workers. The bill’s backers also said eliminating existing mandates to increase investment in renewable energy would result in lower electricity bills, even with the new surcharge for the nuclear plants.
Dan Sawmiller, the Ohio energy policy director the Natural Resources Defense Council, called HB 6 “one of the worst pieces of energy-related legislation we’ve seen.”
The final version of HB 6 calls for residential power customers to pay a surcharge of 85 cents per month to support the nuclear plants, according to the Warren (Ohio) Tribune Chronicle. Major industrial facilities will pay $2,400 monthly. The bill was designed to prop up the nuclear plants, but about $20 million annually will go to large-scale solar projects that have already been approved. The legislation also allows for monthly surcharges on all bills to support the Sammis plant, and a second coal-fired plant in Indiana.
Siderewicz in a statement said the bill is a “classic case of ‘Ohio Main Street bailing out Wall Street’.”
Siderewicz testified before Ohio lawmakers against the bill in April, warning it would take investment in power generation away from Ohio. He said that is now happening, pointing to Clean Energy ending development of Lordstown-3, and LS Power’s decision to back away from a $500 million expansion of its 700-MW gas-fired Troy Generating Facility in Luckey, Ohio. LS Power had planned to add another 500 MW of generation capacity to the plant.
Ohio, with the state’s ability to source gas from the Utica and Marcellus shale plays, has been a hub of activity for new gas-fired power plants. Carroll County Energy, a 700-MW plant near Carrollton, Ohio, came online in December 2017, a few months after the 870-MW Oregon Energy Center near Toledo began operating. The 475-MW Middletown Energy Center north of Cincinnati came online in May 2018.
Construction of the $1.3 billion, 1,182-MW South Field Energy plant near Wellsville in Columbiana County, began in May of this year. The plant is scheduled to come online in mid-2021.
—Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).
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