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Ohio lawmakers weigh bailout for FirstEnergy nuclear plants

John Seewer, Associated Press

FILE – In this April 12, 2005, file photo, operator Kevin Holko monitors the control room during a scheduled refueling shutdown at the Perry Nuclear Power Plant in North Perry, Ohio. Akron-based FirstEnergy Corp.'s customers in Ohio would pay higher rates under a proposed bailout for the state's two nuclear plants, the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio, and the Perry Nuclear Power Plant in Perry, Ohio. The aging plants provide jobs and make 14 percent of Ohio's electricity, but face stiff competition from cheaper natural gas plants. (AP Photo/Mark Duncan, File)

TOLEDO, Ohio (AP) -- A bailout proposed for Ohio's two nuclear plants would keep alive a big source of jobs and tax money but end up increasing electricity rates for FirstEnergy Corp.'s customers in the state.

It will be up to the legislature and Republican Gov. John Kasich whether to approve what would amount to a huge subsidy for the plants.

While it's not known how much FirstEnergy's rates could go up, the increases would be capped at 5 percent.

Exactly how much the plan would generate for the nuclear plants isn't clear yet because it's based on a complex formula that involves plant emissions.

Both New York and Illinois recently approved multibillion-dollar subsidies to stop unprofitable nuclear plants from closing prematurely.

Akron-based FirstEnergy says the subsidies are needed to save the Davis-Besse and Perry plants that sit along Lake Erie and make 14 percent of the state's electricity. The company has said both might be sold even if the subsidies are approved.

The plants are vital to the rural towns where they're located, providing millions in tax money for schools and local governments. The Benton-Carroll-Salem school district east of Toledo could lose $8 million a year if Davis-Besse closes.

Like many nuclear plants around the nation, both Davis-Besse and Perry are aging, costly to operate and maintain and face stiff competition from cheaper natural gas plants.

Backers say that while natural gas is cheap now, that might not always be the case.

They also say the nuclear plants are needed to make sure Ohio has a diverse lineup of energy sources and that they are cleaner than coal plants and reliable.

"Like any energy source, they have unique attributes to maintain a reliable system," said Sen. John Eklund, a Republican from Geauga County in northeastern Ohio, who's sponsoring the proposal introduced this week.

He expects a tough fight over the legislation. Republicans in the state have tried to eliminate mandates for solar and wind power and are sure to question whether it's better to let the market play out.

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.

"Why should anyone subsidize your mess that you created for yourself," said Bill Siderewicz, owner of Boston-based Clean Energy Future LLC, which is building and developing four natural gas plants in Ohio.