Ohio utilities ranked among the worst on fossil fuel use

Coal subsidies passed in corrupt bill could be a culprit

By: - October 6, 2022 5:00 am

A barge loaded with coal sits in the Ohio River. (Photo by Scott Olson/Getty Images)

Three Ohio electricity companies are among the worst in the United States when it comes to weaning themselves off of fossil fuels, according to a major Sierra Club report released this week. And it’s possible that a culprit is huge coal subsidies passed as part of one of the biggest bribery scandals in state history.

With the devastation in Cuba and Florida last week by Hurricane Ian — and by Hurricane Fiona in Puerto Rico just 10 days earlier — there have been plenty of reminders of how destructive extreme weather can be. But there has also been something unprecedented about recent events.

Boats sit grounded in a woodland area and along the side of the road after being pushed by rising water from Hurricane Ian near Fort Myers Beach on Thursday, Sept. 29, 2022 in San Carlos Island, Florida. The hurricane brought high winds, storm surge and rain to the area causing severe damage (Win McNamee / Getty Images).

Not only was Ian the fifth-strongest hurricane to strike the United States, Fiona charged into the normally cold waters of the north Atlantic to become one of the strongest storms ever to strike Nova Scotia, Prince Edward Island, and Newfoundland

Meanwhile, the last three years have been California’s driest on record, while around the world in Pakistan, the worst monsoon flooding in recent history has inundated a third of the country, killing 1,500 so far. Deaths and poverty from the disaster are almost certain to rise.

There is much data and science to support that fossil fuel emissions are making the atmosphere hotter, less stable and causing historic weather events. 

The International Panel on Climate Change last year analyzed 14,000 studies and concluded that human activity is causing global warming and that we’re locked in to seeing it worsen over the next 30 years. It’s urgent to act now, the report said, to make the future less bad. The report said that it was an “established fact” that greenhouse gas emissions were causing extreme weather.

Along those lines, the Sierra Club, an environmental advocacy group, this week updated its first “Dirty Truth” report, which concluded that while electric utilities were promising to cut carbon emissions, they haven’t been acting with the needed urgency.

“Dozens of utilities may have pledged to become ‘carbon neutral’ by 2050, but research conducted by the Sierra Club in its inaugural Dirty Truth Report showed that nearly all utilities in the United States lack the plans needed to move toward clean energy in the time frame needed to avoid the worst of the climate crisis,” a press release accompanying the report said. “In an update to that report a year-and-a-half later, Sierra Club found that most utilities have continued to drag their feet, making little progress in the transition from fossil fuels to clean energy.”

Several of the biggest offenders, according to the report, are Ohio utilities.

For example, it rates Columbus-based American Electric Power as the fourth-worst company in the country when it comes to retiring its coal-fired generation by 203o. The report rates Akron-based FirstEnergy as the eighth-worst.

Electric power generation is responsible for 25% of carbon emissions in the United States, according to the EPA. And while coal might be cheap for power companies to buy, it’s not so cheap when environmental costs are factored in.

“Although coal use accounted for about 54% of CO2 emissions from the (electricity generation) sector, it represented only 20% of the electricity generated in the United States in 2020,” the EPA reports.

For their part, both American Electric Power, or AEP, and FirstEnergy acknowledged the urgency of curbing carbon emissions to avoid the worst effects of climate change.

“We believe climate change is among the most important issues of our time, and we’re committed to doing our part to ensure a bright and sustainable future for the communities we serve,” FirstEnergy spokesman Will Boye said in an email. “Through the diligent execution of our climate strategy we’re working toward achieving carbon neutrality of emissions within our direct operational control by 2050, which we view as a key step in meeting the climate challenge and building a sustainable energy future for the next generation.”

AEP spokesman Scott Blake outlined steps his company was taking to reduce its carbon footprint.

“AEP is making strides to achieve our goal of net-zero carbon emissions by 2045,” he said. “We’re well on our way to transforming our power plant fleet by adding 17 gigawatts of renewables over the next decade, in addition to the recently completed 1.5 gigawatt  North Central Energy Facilities. Traverse Wind Energy Center, part of North Central, is the largest wind farm ever built at one time in North America. Since 2010, AEP has retired the most coal-fueled generation among our peers, and we plan to retire an additional 4,700 megawatts of coal-fueled generation by 2030.”

But the Sierra Club report said that even if AEP, FirstEnergy and other big generators achieve their emissions goals, they’re moving too slowly. It cited a 2019 paper by Climate Analytics that said in order to meet the goals of the 2015 Paris Climate Agreement, developed nations need to retire their coal-fired generation by 2030 and all nations need to be out of it by 2040.

“On the whole, the utilities in this report have plans to retire barely over a quarter of their coal generation, 28 percent, by the end of 2030,” the Sierra Club report said.

In answer to claims that shifting to renewables so quickly isn’t feasible, the report cited a 2021 “meta-analysis of 11 studies released since 2020 by universities, think tanks, and non-governmental organizations (that) converge on the immense benefits and feasibility of achieving 80% clean electricity by 2030.”

Wind turbines rise up above farmland. (Photo by Scott Olson/Getty Images)

The analysis said the studies “collectively affirm that achieving 80% clean electricity by 2030 is feasible, affordable, critical to meeting national climate goals, and deeply beneficial to the economy and public health—all without compromising power system reliability.” It added that such power would be at least as cheap as that produced by fossil fuels.

One factor that might make Ohio’s utilities reluctant to move away from their coal fired generation is that some of it is heavily subsidized by ratepayers.

Those subsidies were part of House Bill 6, which was signed in 2019 by Gov. Mike DeWine. 

It’s best known as a historic corruption scandal in which FirstEnergy admitted to paying out tens of millions in bribes to pass a billion-dollar bailout of two nuclear plants owned by its former subsidiary. But it also gutted renewable energy standards and it allowed for ratepayer subsidies to two coal-fired plants — one in Ohio and another in Indiana.

The state’s consumer watchdog estimates that so far the plants, which are owned by a consortium of utilities, have so far received more than $180 million in such subsidies. In other words, while climate scientists and environmental advocates are calling for utilities to shut down their coal generation, a corrupt Ohio law is paying them to keep it on-line.

Asked if the subsidies made AEP — the primary owner of the plants — reluctant to shutter them, Blake didn’t answer directly.

“There are currently no established retirement dates for the OVEC plants, however, it’s important to remember that OVEC is currently paying a monthly credit of $0.12 to the average residential customers,” he said. “OVEC, and other baseload generation resources, are still an important part of providing safe and reliable electricity.”

Boye said FirstEnergy doesn’t benefit from the subsidies.

“Although certain FirstEnergy subsidiaries are considered OVEC shareholders, we do not profit from our OVEC ownership,” he said. “In addition, any money we collect from our Ohio customers related to the H.B. 6 OVEC provision is ultimately passed along to other Ohio utilities – AEP, AES and Duke – to cover their costs.”

Aerial photograph of the OVEC-operated Kyger Creek Power Plant in Cheshire, Ohio taken April 2012. Getty Images.

The Sierra Club report also bestowed on FirstEnergy and a small Ohio utility a dubious distinction. 

It scored utilities on their commitments to retire coal, and their abandonment of plans to build plants fired by natural gas — which is cleaner than coal, but still a greenhouse gas emitter. It also scored their plans to move to renewables.

Buckeye Power, FirstEnergy, and Seminole Electric Cooperative tied for the worst scores among the 50 utility parent companies evaluated. AEP, by contrast, got the ninth-best.

Buckeye, which supplies power to member-owned electric cooperatives, said the Sierra Club report is unrealistic.

“The Sierra Club analysis is an overly simplistic view of utility performance based solely on carbon emissions,” spokeswoman Caryn Whitney said in an email. “It ignores reliability of supply, especially during extreme weather events, ignores the cost to consumers, the investments to reduce traditional pollutants and other broad community impacts. Unfortunately, the world and the electric supply industry is far more complicated.”

The Pentagon itself has said that climate change is a threat to national security. But Whitney said coal, a big contributor to climate change, is necessary to energy security.

“Coal is essential to keeping rural America running and now, more than ever, coal is an essential part of the nation’s energy security strategy,” she said. “America cannot run on renewables alone. We need a diversified energy approach, one that includes coal, to meet the increased demand of our co-op members. We have a path to have more flexibility in our generation supply, but we have to be responsible. If we transition away from coal too quickly, we risk compromising the stability and security of our nation’s energy grid.”

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Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.