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Utility lobbies for rate hike

FirstEnergy tries to sell lawmakers on saving nuke plants

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The Davis- Besse nuclear power plant in Ottawa County is one of several that FirstEnergy says it is trying to save with its plan for higher costumer rates. It also has the Perry nuclear plant in northeast Ohio and its Beaver Valley plant in Pennsylvania.

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CLEVELAND — FirstEnergy Corp.’s plan to convince Ohio lawmakers they should save the company’s nuclear reactors by funneling more money from customers to the company has still not seen the legislative light of day.

But for certain, the Akron utility company has shopped its proposal to key lawmakers with a full-color, professional-looking, authoritative brochure that looks very much like an investor presentation.

“Benefits of Ohio’s Nuclear Assets” has been circulating behind closed doors since January, according to the date on its title page.

The plan would increase customer monthly bills by at least 5 percent and raise an extra $300 million a year for FirstEnergy. In perpetuity. And the increase would affect all customers, even those who buy power from competitors. FirstEnergy owns Toledo Edison, a primary electricity provider in northwest Ohio.

RELATED: See the full proposal

The 13-page document lawmakers are using to create legislation cannot be found on the energy company’s website because, said spokesman Jennifer Young, some of the language may change. But it is a FirstEnergy document, she confirmed, that was obtained by the Plain Dealer.

The booklet explains how important it will be for Ohio to keep FirstEnergy’s Ohio-based Davis-Besse and Perry nuclear plants running, as well as its Pennsylvania-based Beaver Valley plant, even if the electricity is more expensive than market-based prices.

The argument for nuclear includes the familiar themes: Power plants support jobs, pay taxes, run around the clock, produce little if any carbon dioxide, and add fuel diversity, meaning it would be risky to rely entirely on natural gas, coal, wind, and solar.

But operating a nuclear plant is expensive. The solution, the company argues, is for the state to create “Zero Emission Credits,” or ZECs, which are a nod to the environmental benefits of operating nuclear reactors.

That’s what similar programs in New York and Illinois are calling the subsidies. FirstEnergy is doing the same, however, it’s giving the subsidy a slightly different acronym, ZEN, for Zero-Emissions Nuclear Resource Program.

The ZEN would be permanent, even if the company sells the plants and concentrates on operating its regulated subsidiaries, local distribution, and long-distance transmission companies. Many top company executives insist they will do just that by next year unless the state reverses 17 years of competition and puts power plants back under regulation.

Whenever FirstEnergy’s plan emerges as a bill supported by GOP leadership, which some say could be this week, competing power companies are set to oppose it and any other legislation that would undermine competitive markets.

Dynegy and NRG, two Houston-based independent power companies that now operate coal-fired power plants in Ohio that the old utilities like FirstEnergy chose to sell rather than modernize, say they will oppose the legislation.

Abraham Silverman, vice president and deputy general counsel of NRG Energy, which owns and operates the Avon Lake plant FirstEnergy once owned, said ZECs are “a pure exercise in greed.”

Dynegy’s Dean Ellis, senior vice president for regulatory affairs, said, “FirstEnergy’s proposal is a handout scheme. The ZEC program is a stealth tax on Ohio citizens and businesses.”

Mr. Ellis said natural gas will replace the least efficient coal and nuclear plants, not only because gas is the lowest priced fuel and likely to stay the lowest in this region, but because gas plants can more easily deal with growing wind and solar power because they can ramp up at a moment’s notice.

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