Columbus, OH – On Tuesday, The Buckeye Institute submitted written testimony (see full text below or download a PDF) to the Ohio Senate Energy and Public Utilities Committee on the policies in Senate Bill 44, which would eliminate the taxpayer-funded subsidies included in the “notoriously flawed” House Bill 6 from the 133rd General Assembly.

In his testimony, Greg R. Lawson, a research fellow at The Buckeye Institute, told lawmakers that eliminating the “notoriously flawed” taxpayer-funded subsidies included in House Bill 6 was an “important course correction” that would end one of the worst examples of crony capitalism. 

However, Lawson went on to note that while the bill wisely eliminates one taxpayer-funded subsidy for the nuclear power plants, it imposes a new taxpayer-funded subsidy for the solar industry thus “repeating the mistakes of House Bill 6.”

Lawson closed by urging lawmakers to eliminate the taxpayer-funded nuclear energy subsidies, eliminate House Bill 6’s egregious decoupling provisions that locked-in higher energy prices for consumers to benefit FirstEnergy, and eliminate electric security plans—included in the 132nd General Assembly’s House Bill 274—which enabled energy companies to charge customers more than the market price for electricity. “Taking these steps would foster and promote a fair, competitive, and transparent energy market that would provide Ohio with reliable, low-cost electricity.”

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Eliminate Ohio’s Energy Subsidies

Interested Party Testimony
Ohio Senate Energy and Public Utilities Committee
Senate Bill 44

Greg R. Lawson, Research Fellow
The Buckeye Institute
February 23, 2021

Chair Peterson, Vice Chair Schuring, and Ranking Member Williams, thank you for the opportunity to submit written testimony regarding Senate Bill 44.

My name is Greg R. Lawson, I am the research fellow at The Buckeye Institute, an independent research and educational institution—a think tank—whose mission is to advance free-market public policy in the states.

Senate Bill 44 takes some corrective steps to improve Ohio’s energy policy. The bill rightly eliminates the taxpayer-funded nuclear energy subsidy scheme ensconced in the notoriously flawed House Bill 6 enacted by the 133rd General Assembly. The subsidies in House Bill 6—most notably the $150 million per-year nuclear energy subsidy—epitomized crony capitalism at its worst, and by removing those subsidies Senate Bill 44 makes an important course correction. 

The Buckeye Institute continues to advocate for competitive, transparent energy markets in which power generators risk their own capital—not the taxpayers’—to sell electricity to Ohioans. That market competition should be held on a level playing field. Regrettably, Ohio has consistently allowed utilities and politically-favored power generators to avoid transparency, shift market risk to ratepayers, and make it harder for unsubsidized power plants to compete. 

Unfortunately, after taking one step forward, Senate Bill 44 takes another step back. Although it  eliminates the nuclear energy subsidies, the bill then substantially subsidizes the solar panel industry. Ohio has very low potential to produce meaningful solar energy and throwing taxpayer dollars at the industry would be inefficient and counterproductive. Replacing one taxpayer-funded energy subsidy with another is no way to level the energy playing field.

Instead of artificially supporting another energy provider with taxpayer dollars and repeating the mistakes of House Bill 6, Senate Bill 44 should simply eliminate the taxpayer-funded nuclear energy subsidies. Additional steps should include moving forward with Senate Bill 10, which eliminates “revenue decoupling” and allows customer refunds by utilities, and revisiting the 132nd General Assembly’s House Bill 274, which would eliminate electric security plans and require monopoly utilities to fully divest themselves from power plant ownership. Taking these steps would foster and promote a fair, competitive, and transparent energy market that would provide Ohio with reliable, low-cost electricity.

Thank you for the opportunity to submit written testimony on this important issue. 

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