FirstEnergy Nuclear Deal will Save Customers $256 million in Ohio

Uranium (Nuclear Minerals) / Nuclear Power - Economics, Design, & Industry

Date posted: 04/04/16

John Funk, of The Plain Dealer, reports that the Davis-Besse nuclear power plant east of Toledo will get special customer subsidies under a new FirstEnergy rate plan approved this week by state regulators. FirstEnergy customers could save $256 million during the next eight years, state regulators believe, by paying increased monthly bills now. That extra money, which could be as low as $3.50 or as high as $8 to $10 per month in the next couple of years, will subsidize the operations of two power plants that cannot match the low-priced power produced by natural gas-fired plants that currently set wholesale prices on the high-voltage grid. The Public Utilities Commission of Ohio handed down its ruling Thursday, agreeing with FirstEnergy that saving the old power plants is a good idea and that in later years the arrangement will lower customer bills because natural gas prices could increase significantly. The commission also concluded that if the plants were to close, the cost of building new transmission line upgrades would be between $436 million and $1.1 billion, an expense customers would bear. The opinion and order, which those involved in the case say is sure to be appealed, dismisses the opponents experts arguments, including the Ohio Consumers Counsel, the Northeast Ohio Public Energy Council, the Sierra Club (as would be expected), competing power companies and others. These analysts concluded that the power deals could cost FirstEnergy customers an extra $3 billion to $5 billion over the eight years. The agency evaluation of arguments made by FirstEnergy gas experts and its own evaluation of future natural gas prices concluded that the assertion that gas prices will stay low indefinitely is not realistic. The Commission does not believe that the evidence supports OCC and NOPEC predictions that the public have entered a period of energy price Utopia where the price of natural gas, electricity and oil remains flat for a period of 15 years. Read details.