A proposed electricity rate increase for FirstEnergy Corp. customers in Ohio to keep alive two nuclear plants along Lake Erie shouldn't be considered a bailout, the utility's president told state lawmakers.
The plants need to keep operating to ensure Ohio has a diverse lineup of homegrown energy sources and that electricity prices aren't vulnerable to wild swings, said FirstEnergy President Chuck Jones.
The company is trying to persuade lawmakers to approve a plan that could generate about $300 million each year for its nuclear plants by increasing residential customers' bills by as much as $5 a month. Businesses would pay much more.
It would go on for four years and could last another 12 under the proposal designed to rescue the Davis-Besse and Perry plants that make 14 percent of the state's electricity.
Like many nuclear plants around the nation, both plants are aging, costly to operate and face stiff competition from cheaper natural gas plants.
"Ohio cannot afford to continue heading down a path that could lead to less fuel-diverse and fewer homegrown energy resources, more energy imports, fewer jobs, and less economic growth," Jones told lawmakers Tuesday.
He also said it would "support well-paying jobs, economic growth, environmental progress and of course, reliable and affordable electricity."
Both New York and Illinois recently approved multibillion-dollar subsidies to stop unprofitable nuclear plants from closing prematurely.
Developers of natural gas plants being built in Ohio say they can replace the power produced by the nuclear plants and that it's unfair to ask utility customers to pay FirstEnergy for a bailout.
The Ohio Manufacturers Association also has come out against the plan, saying it's an attempt to force customers to pay above-market prices for electricity.
Information from: The Blade, http://www.toledoblade.com/