How important are the Davis-Besse and Perry nuclear power plants to the task of curbing climate change? Their closure would amount to losing all the renewable energy development of the past 25 years in Ohio and the dozen other states served by the PJM transmission grid operator. Davis-Besse, near Toledo, and Perry, east of Cleveland, account for 90 percent of the state’s clean energy. So it is imperative that state lawmakers find a way to keep the plants running, assigning the value the marketplace fails to recognize.
The revised version of House Bill 6, now the focus of discussion at the Statehouse, gets to the objective. It does so, essentially, as first proposed, by routing credits, or subsidies, to the nuclear plants and other forms of clean energy. That revenue puts the nuclear plants in a more competitive position in a market dominated by cheap and abundant natural gas. The subsidies serve as an insurance policy against the fallout from climate change, scientists warning about increased disruption, the expense far exceeding what ratepayers would pay.
What is most different about the updated H.B. 6 is the implementation, phasing in the program, resulting in lower initial costs for ratepayers, 50 cents per month in the first year and then $2.50 per month. The proposal also expands the eligibility for renewable energy sources.
The trouble is that the bill continues to neglect the important role of the state’s renewable energy standard in making the transition to a sharply reduced reliance on fossil fuels. The standard currently calls for 12.5 percent renewable energy in the state portfolio by 2027. That effort would be dismantled, reflecting the longtime opposition of many in the Republican majorities.
The idea isn’t that a renewable energy standard is flawless. As recent research from the University of Chicago has found, such standards are a mixed bag. In assessing the outcomes in the 29 states with renewable standards, the study learned the standards perform well in reducing emissions of carbon dioxide. The downside is that they do so at a relatively high cost, roughly $130 per ton. A going estimate of the “social cost” of carbon is more in the range of $50 per ton.
Is that a case for abandoning the renewable standard? The answer depends on the alternative, even Republican proponents of H.B. 6 rightly framing the larger objective as reducing the state’s carbon footprint.
Little points to renewable sources doing better under the legislation, or the bill bolstering the complementary standard for improved energy efficiency. The bill does not include an easing of the setback requirements for wind turbines, the restrictions having practically halted wind investment in the state. An alternative might be a carbon tax, though that seems a nonstarter for lawmakers, not to mention a step more suited to broader implementation than a single state.
A more fitting substitute is a proposal from the Environmental Defense Fund, Ohio setting a binding limit on carbon emissions that would steadily decline over time. In that way, markets would drive the response. That wouldn’t address the immediate need to keep Davis-Besse and Perry operating. It would play to their strengths and forecast an early reassessment of the subsidy need.
Without such a strategic alternative, and House Democrats get closer with their plan that includes a 15 percent baseline for nuclear generation, the renewable energy standard remains a productive option. More, the standard doesn’t just deliver lower carbon emissions. Renewable sources, and nuclear, are free of other pollutants harmful to public health. The likes of wind and solar also spur innovation, clean energy offering a new frontier of growth and jobs, in another way benefits offsetting costs.