FirstEnergy Solutions took a big step toward emerging from bankruptcy last week. The Akron-based power generating company announced the completion of a “restructuring support agreement” with creditors. Gain approval from the federal bankruptcy court, and the company likely will be in position to exit the protection in the fall. To do what, exactly? FES won’t be operating its two nuclear power plants in Ohio without help from the Statehouse.
The request for assistance has been on the table going back to the previous legislative session, before the parent company FirstEnergy separated from its subsidiary. The need is no less urgent, and not just for FirstEnergy Solutions. The Davis-Besse and Perry nuclear power plants account for roughly 90 percent of the state’s clean, or carbon-free, energy. Without their contribution, the task of addressing climate change becomes more difficult.
Chances are, new natural gas turbine power plants largely would make up the loss in generation. Natural gas burns cleaner than coal. Still, it emits carbon, and thus adds to the climate problem.
By now, the story is familiar. Nuclear power faces a competitive disadvantage with cheap and abundant natural gas. As a result, FES wants lawmakers to approve a program of zero emission credits, a revenue stream drawn from customers that would put the company in a stronger financial position. Illinois, New Jersey and New York already have set up similar arrangements. The concept isn’t so much a bailout as it is a policy decision reflecting the value of a steady source of clean energy.
In that way, the credit program is akin to a carbon tax, policymakers intervening to serve the public interest, in this instance, to maximize the capacity to reduce the greenhouse gases warming the planet.
To be sure, clean renewable sources of energy, such as wind and solar, are adding capacity as they become more competitive. Yet they are not advancing quickly enough, especially in view of the recent warning from the U.N. Intergovernmental Panel on Climate Change that carbon emissions must be reduced 45 percent by 2030, on the way to zero emissions by 2050, to avoid the calamitous consequences of warming beyond an average 1.5 degrees Celsius, or 2.7 degrees Fahrenheit.
That won’t happen without the current fleet of nuclear power plants, not to mention additions. Consider that closing the two Ohio nuclear plants, plus the two FES nuclear plants in Pennsylvania, would mean the equivalent of losing all the renewable generation installed the past 25 years across the PJM transmission territory of Ohio and the 13 other states, plus Washington, D.C. At current levels of renewable expansion, the loss would be made up sometime in the early 2030s.
Proponents of the zero emission credits argue the program is necessary to preserve the reliability of the transmission grid or an appropriate balance of power sources. Yet PJM, the grid operator, has indicated that isn’t so. A stronger argument for the credits comes from the communities surrounding the nuclear plants. They point to the harmful economic effect of allowing the plants to close, starting with the 4,000 jobs directly tied to their operation.
Yet that isn’t what is most persuasive. Whatever the flaws in nuclear power, and they are real, though often exaggerated, it has a crucial role to play in combating accelerating climate change. There is something far more threatening. Which is why Gov. Mike DeWine and state lawmakers have good reason to see that FirstEnergy Solutions emerges from bankruptcy with its nuclear power plants in position keep providing electricity to homes and businesses.