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Bailing out buggy whips
The Ohio Senate’s HB 6 substitute bill (the first formal revision to the House version) is still a bailout bill, providing $150 million per year for FirstEnergy Solutions’ two old and uneconomic nuclear reactors. It also would have Ohio taxpayers pay a larger (but undefined) amount for two (really) old and uneconomic coal-fired power plants, one of which is in Indiana. And though the legislation claims to preserve efficiency and renewable energy provisions, its details reveal that those effective clean energy programs would be gutted. If we took this approach 100 years ago, we’d be subsiding buggy whips instead of investing in the emerging automotive industry.
Bill sponsors claim it holds FirstEnergy Solutions accountable, but it gives oversight of bailout funds to the Public Utilities Commission of Ohio, which the Ohio Supreme Court just found had illegally provided FirstEnergy with a $600-million check — no strings attached.
This new bailout bill would have Ohio subsidize energy generation sources of the past and abandon the future of energy innovation. Other states must be cheering for the investments and jobs that will flow to them from Ohio.
Who really benefits?
FirstEnergy and its supportive legislators have tied themselves in knots to sell their HB 6, a $1.4 billion money grab by a giant corporation and its speculative, out-of-state investors that made a bad bet on a declining business. Let’s be clear. There’s no crime in gambling on troubled companies. It happens a lot on Wall Street. But their risky bets shouldn’t cost Ohioans $150 million a year.
The people who would pay for HB 6 all live right here – on Main Street in every town across the state. But their $150 million annual “investment” would exit Ohio so quickly we’ll be able to hear the “whoosh” sound. Bob and Betty Buckeye shouldn’t be stuck covering someone else’s bad business decisions.
Conservatives?
It’s ironic that some of the biggest bailout boosters claim to be conservatives who stand for free markets and against corporate cronyism. In fact, the 2016 national Republican Party platform states: “We support the development of all forms of energy that are marketable in a free economy without subsidies [emphasis added], including coal, oil, natural gas, nuclear power and hydropower.” HB 6 utterly abandons this conservative creed by bailing out the FirstEnergy Solutions’ nuclear reactors and the Ohio Valley Electric Corporation coal plants.
Conservative lawmakers often say they base their policies on the ideas of Nobel Prize-winning economist Friedrich Hayek. But Hayek favored free markets and opposed government interventions and subsidies. If he were alive today, Hayek would be shocked by HB 6 and its support from erstwhile conservatives.
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