Remarks of Dave Griffing
Vice President, Government Affairs
FirstEnergy Solutions
Energy and Natural Resources Committee
Sub-Committee on Energy Generation
Ohio House of Representatives
April 17, 2019
Chairman Stein, Chairman O’Brien, and distinguished Members of the Committee,
thank you for inviting me to speak before you today. I am Dave Griffing, Vice
President of Government Affairs for FirstEnergy Solutions, and I am here today on
behalf of the nuclear generating facilities in the state of Ohio.
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Nuclear power forms the backbone of Ohio’s electric generation fleet and is a
major driver of the state’s energy economy. Ohio is home to two nuclear facilities,
which are both owned and operated by FirstEnergy Solutions. Davis-Besse is
located in Oak Harbor and the Perry plant is located in Perry, Ohio. Together,
these facilities represent over 2,100 MW of capacity, enough to power between 1.5
– 2 million homes. Roughly 4,300 Ohioans are employed, directly or indirectly, in
the nuclear industry, which contributes $510 million to the Ohio GDP annually and
over $30 million in annual state and local taxes.

In addition to being an economic engine for the state, nuclear power is safe,
reliable, and clean. Nuclear facilities produce emissions-free power around-the-

 clock, uninterrupted, with planned refueling outages occurring only every eighteen
to twenty-four months. They have all the fuel they need secured safely on-site,
which allows them to avoid the kinds of disruptions that plague the rest of the
industry. Indeed, nuclear power’s contribution to the reliability and resilience of
the electric grid is unmatched. During very cold weather patterns, there are often
major fluctuations in the availability of most power sources: gas-fired generators
deal with pipeline capacity constraints or might see their fuel supply diverted to
satisfy home heating demand; coal plants can face weather-related difficulty
transporting or storing coal. Wind can tail off during extreme cold temperatures,
while solar is already offline in the evening or early morning hours. Nuclear
power, by contrast, is remarkably reliable, and typically picks up the slack as other
generators struggle.

Our civilian nuclear power industry, moreover, is critical to our national security.
Nuclear power currently represents around 20 percent of our nation’s power mix,
but that share is declining. Meanwhile, China has begun a high-profile effort to
build 60 nuclear plants over the next ten years. Our civilian nuclear supply chain,
led by our partners like Westinghouse, Framatome, and others, is vital to national
defense, and our vast expertise in nuclear technology allows us to remain a world
leader in nuclear non-proliferation issues. As our capabilities decline due to the
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 closure of facilities and a lack of domestic plant manufacturing, other countries—
including those with very different views on proliferation issues—will fill the void.

Both of Ohio’s nuclear plants have initiated the deactivation process. Davis-Besse
is scheduled to shut down in May of 2020, and Perry is scheduled to shut down in
2021, but the final decision about whether to deactivate the units will come much
sooner than that. Due to the significant expense associated with refueling a nuclear
facility, FirstEnergy Solutions will need to make that decision this summer. If
retired as currently scheduled, both plants would be shutting down well before
their current operating licenses are set to expire, and they would not be brought
back into operation.

The impact of losing the state’s nuclear facilities cannot be overstated. Nuclear
power represents 90% of the state’s zero-carbon electricity. These facilities allow
the state to avoid 9.3 million metric tons of CO2 annually and prevent significant
emissions of criteria pollutants like sulfur dioxide, nitrogen oxide, and particulate
matter that cause asthma and other health problems. Independent experts value
these contributions at $600 million per year. If these facilities are lost, Ohio would
be forced to import about 12% of its power. Carbon and other harmful emissions
will increase. Grid resilience will deteriorate. And costs to consumers will go
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 up—a typical residential customer’s bill would go up by an average of $35
annually between 2022 and 2029, with an increase by as much as $68 by 2029,
according to a recent independent study.

Opponents of nuclear power will argue that these plants are simply failing to
compete and that you should “let the market” decide what happens to them. Let
me offer some perspective on that. Ohio participates in the PJM wholesale market,
which is regulated by FERC. That market decides which power sources are asked
to run in Ohio and what they get paid. Generators offer their units into the market
based on their variable cost and PJM ranks them from lowest to highest offer price.
The market price is then set by the most expensive plant needed to meet demand.
This process does not consider whether the selected plants negatively impact air
quality in the state. It does not account for whether the power plants add harmful
carbon pollution into the atmosphere. All it does is pick the power that is cheapest
for the next five-minute increment. Generators that emit carbon or other criteria
pollutants therefore enjoy the luxury of having their pollution costs subsidized by
all citizens. They do not have to factor these costs into their PJM market offers,
which in turn makes non-emitting sources, like nuclear, wind, and solar, appear
more expensive.

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 It is therefore not credible to say nuclear power “can’t compete.” On one hand,
some plants have been able to pollute for free, not bearing any of the costs of the
pollution they put into the air and the water. On the other hand, just about every
form of clean energy technology, except nuclear, receives a payment from the state
and/or federal government through renewable energy credits and tax credits. The
unintended consequence is that nuclear facilities here and elsewhere in the country
are facing the prospect of premature retirement, a paradoxical result as we try to
move to an affordable, lower-carbon economy. And let’s be clear, if nuclear plants
close and are removed from the supply curve, the replacement power will come
from plants that generate carbon and were previously too expensive to be called.

The PJM market’s singular focus on cost ignores other policy goals as well. Fuel
diversity is a particularly relevant issue in Ohio ignored by the market. We have
experienced the downside of an overreliance on one fuel source, coal, including the
disruption that occurs when that one fuel source suddenly falls out of favor. Part of
the reason coal has fallen out of favor is because our state has been blessed with
another abundant, low-cost source of fuel: natural gas. But if we are not careful,
given PJM’s singular focus on cost, we may see history repeat itself with an
overreliance on natural gas. The displacement of coal by natural gas is well
underway, and if legislative support is not provided, natural gas will soon replace
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 all of the nuclear generation in our state as well. That outcome would leave the
state overly dependent on a single fuel source once again—only this time, that fuel
source would be one that faces unique supply chain challenges because natural gas
is also used for home heating needs. PJM has not, and will not, prevent this
displacement. And frankly, it’s not their job. That job has been entrusted to you,
the policy makers, who have the ability to shape the resource mix in this state. The
proposed bill is designed to give Ohio the tools it needs to maintain a diverse and
reliable generation portfolio as we transition to a cleaner energy future.

Specifically, using funds recovered through a modest charge on utility bills, the
proposed bill would compensate the clean air attributes of various clean energy
sources, including nuclear resources that are currently excluded from similar
programs. The proposed legislation therefore provides the state with the ability to
preserve the benefits of nuclear power—the only zero-carbon, baseload generation
source we have—while expanding the support to other carbon-free technologies as
they further develop. In short, this bill allows the state to build on its existing
clean air resources, including nuclear, wind, solar and others, and develop a
comprehensive approach to maintain and grow a diverse, reliable, clean generation
portfolio in the state.

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 House Bill 6 provides a framework for Ohio to transition to a cleaner energy
future. As proposed, this bill will save the average residential customer
approximately $2 per month. Failure to pass this bill will increase Ohioans’
electric bills, create a generation portfolio dominated by one fuel source, eliminate
any possibility of achieving environmental goals, eliminate thousands of highlyskilled jobs, and represent a loss of economic vitality for many of our
communities. Through House Bill 6, I believe Ohio has the opportunity to prevent
this outcome.

Thank you for your time and attention.

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