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A dirty battle for a nuclear bailout in Ohio via the Bulletin of Atomic Scientists

By Shakiba FadaieM. V. Ramana, April 21, 2020

Last July, Ohio’s governor signed House Bill 6 (HB6) to provide FirstEnergy (now Energy Harbor), a large electric utility, with subsidies of nearly $150 million per year to keep its Perry and Davis-Besse nuclear power plants operating. Ohio is only the fifth US state to offer such subsidies; other states include New York, Illinois, New Jersey, and Connecticut. Although the subsidies are justified by some as necessary for climate mitigation, in the latter four states, electricity generation from natural gas, which results in greenhouse gas emissions, has increased since 2017, when these subsidy programs started kicking in. Moreover, in Ohio, subsidies are also being extended to coal power plants, providing the clearest illustration that what underlies the push for subsidies to nuclear plants is not a result of a real commitment to climate mitigation but a way to use climate concerns to bolster the profits of some energy corporations.

The enormous lobbying effort that won the subsidies used dark money–backed organizations that spent millions of dollars to sway voters and politicians. But it didn’t stop with the bill being signed into law—the lobbying also thwarted the ability of citizens to put the proposal to a democratic vote through a referendum, including by funding television advertisements that falsely claimed that China was “intertwining themselves financially in our energy infrastructure” and threatening “national security,” implying that not going through with the nuclear bailout would somehow lead to Chinese control of Ohio’s power grid. As confronting climate change gets in the way of corporate profits, such dirty battles are sure to emerge more often.

Electricity economics. It has been known since the late 1970s that the cost of constructing nuclear plants in the United States is very high, but the cost gap between nuclear electricity and other alternatives has increased dramatically in the last decade. In its most recent estimate, the Wall Street firm Lazard estimated that a new nuclear plant will generate electricity at an average cost of $155 per megawatt hour, nearly four times the corresponding estimates of around $40 per megawatt hour each for new wind and solar energy plants. The average cost for natural gas plants is $56 per megawatt hour.

The gap will only grow larger. While the costs of nuclear power have been increasing, the costs of wind and solar power have declined by around 70 to 90 percent in the last decade. Even solar projects that offer some amount of storage to meet demand when the sun no longer shines are becoming cheaper. Last year, the city of Los Angeles signed such a contract at $33 per megawatt hour. So new nuclear power plants are simply not competitive in the US electricity market.

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