Draft bill would let utilities own nuclear plants in Ohio

House Bill 15, a major energy law that blocked utilities from owning and operating electricity generation, cruised through Ohio’s legislature last year with nearly unanimous support from both parties. Now, draft legislation aims to carve out an exception to the popular law and allow utilities to build, own, and operate ​“advanced nuclear energy technology.”

If the bill becomes law, it could push massive costs onto customers without addressing immediate energy needs. Utilities, meanwhile, would face no risk: Instead, they would be granted a way to make guaranteed profits from expensive nuclear power plants.

There’s a long road ahead for the bill. Though the draft language has been circulating among some lawmakers since at least the end of January, it has not yet been introduced. House Rep. Adam Mathews, R–Lebanon, is expected to introduce it into the state’s Republican-controlled legislature in the coming months.

Ohio’s government has shown support for nuclear power in recent years by declaring it to be ​“green energy” and by allowing it and natural gas to get grants and low-interest loans under a JobsOhio Energy Opportunity Initiative. But the bill’s focus on utility ownership has spooked even some who have been supportive of nuclear power, as the state’s House Bill 6 scandal involving nuclear and coal bailouts still reverberates.

The draft legislation employs a broad definition of ​“advanced nuclear.” The state is sure to count small modular reactors, or SMRs, under the umbrella, along with the latest iteration of the large-scale, pressurized-water technology that underpins America’s nuclear fleet.

Supporters of nuclear power highlight how it can help meet surging energy demand without pumping greenhouse gases into the air during operation, and note that it can generally run 24/7. But critics, in Ohio and beyond, point out that recent attempts to build nuclear power plants in the U.S. have been plagued by cost overruns and missed deadlines.

The Alvin W. Vogtle Electric Generating Plant’s Unit 4, the nation’s newest large-scale nuclear reactor, took more than a decade to build in Georgia and blew past its budget before it came online in 2024. Supply chain shortages, skilled labor issues, and other factors could extend the time frame for any new nuclear plant to come online.

Meanwhile, SMRs remain a major unknown. No such reactors operate commercially in the United States. Last week, the Nuclear Regulatory Commission approved a construction permit for TerraPower, but that sodium-cooled plant is unlikely to be up and running in Wyoming for at least five years.

“We’re talking about 10, maybe 20 years down the road,” said Ohio Rep. Tristan Rader, D-Lakewood, who opposes the proposal. ​“How does that address the need for generation today?”

Mathews, the bill’s likely sponsor, thinks that the energy will be worth the wait.

“Even if it takes a while for this energy relief to come on, it will help meet the increased demand that we expect in the coming decades,” Mathews said. He stressed that circulating drafts are not the final version and said that a bill won’t be formally introduced without ​“full, robust protection for the ratepayers.”

Critics doubt any such assurance. Before HB 15 passed last year, Ohio utilities had a history of shifting costs from unregulated power plants to distribution customers. The companies have also shifted some costs from large industrial companies to consumers.

If this bill eliminates the bright line that finally exists between utilities and generation companies, utilities might again ​“leak the costs of generation into the distribution side” of their business, said Andrew Thomas, executive-in-residence at Cleveland State University’s Energy Policy Center. In his view, the proposal ​“just opens up a whole new world of accounting that is high risk for ratepayers.”

Critics also worry that the bill would disrupt competitive markets.

A 1999 law began Ohio’s shift toward a competitive, deregulated market for electricity. HB 15, which Rader and Matthews both supported, completed it last year. Various other states have moved toward competitive markets as well. Yet Mathews noted that some states still have vertically integrated utilities, where companies control all steps of electricity production and distribution.

Giving such control back to utilities ​“means the customers would be stuck holding the bag for any bad decisions and mismanagement,” said Ryan Augsburger, president of the Ohio Manufacturers’ Association. That, in turn, would interfere with competition. ​“You’re interfering with the market.”

A guaranteed market

The draft bill obtained by Canary Media would let utilities ​“construct, own, and operate” nuclear generation and include a facility in its rate base for the plant’s full life, with ​“all prudently incurred costs … reflected in the utility’s distribution rates.”

To qualify for approval, draft bill language says utilities would need one or more customers, such as data centers, to agree to a ​“retail participation agreement” for at least 20 years to buy a nuclear plant’s electricity. Payments under the agreement would offset the cost of building the facility, and the customer base at large shouldn’t have to pay.

But after that 20-year period, the broader customer base could be on the hook. That’s because a utility would be guaranteed sales from the facility, even if its electricity is more expensive than other options on the market. The bill could allow a utility to shift the costs of decommissioning the nuclear facilities to customers, too.

“I’m leery of these 20-year deals,” said Dennis Wamsted, an energy analyst at the Institute for Energy Economics and Financial Analysis, who noted that there are many risks. Companies entering into agreements with the utility might not be around that long. Or they might be subsidiaries or joint ventures with limited assets, as is the case for many oil and gas drilling projects.

Just as important, technology doesn’t stand still. On the demand side, data centers could become more energy efficient as artificial intelligence techniques are refined, thus needing less electricity. As for supply, solar and wind and batteries are likely to keep getting cheaper over time.

From Wamsted’s perspective, renewables are a much better choice for addressing growing power demands. 

“You can build these things today … You can bring them online in two years, maybe three years,” Wamsted said — and ​“they’re competitive.” 

The bill has clear support from American Electric Power, which owns Ohio Power Co., the largest single utility in the state.

The version of the draft bill obtained by Canary Media includes the name Levi Gross as part of the document title. Gross is a registered lobbyist for AEP.

AEP spokesperson Scott Blake did not answer Canary Media’s questions about why all customers should be on the hook after those agreements run out, or why one of the most expensive types of electricity should be included in utilities’ rate bases.

“For more than 20 years, Ohio has retired more power plants than it has added, resulting in an energy supply shortage that is driving up energy prices for all Ohioans,” Blake said in a prepared statement. ​“New nuclear power solutions offer Ohio the steady, around-the-clock energy supply that is needed to support this unprecedented demand growth and stabilize energy prices.”

The suggestion that building unproven SMRs would ​“stabilize energy prices” also drew skepticism from critics. 

The bill’s supporters argue that SMRs will fall in price as more and more are constructed, but for now that theory is unsupported by evidence.

“There will need to be a lot of small modular reactors … to bring that cost down to be even close to competitive,” said John Seryak, lead analyst at the consulting firm RunnerStone, who regularly provides advice on energy issues for the Ohio Manufacturers’ Association.

The draft bill’s language also suggests there could be commingling of expenses and revenue streams for the utilities, which raises the risks for shifting more costs to ratepayers in general, Seryak said. ​“We come back to the best place: You just don’t do it from the start.”

Mathews said discussions are ongoing, so the version of the bill that will eventually be introduced will likely differ from the draft. But even with changes, Rader and other critics feel the proposal would be a big step backward.

“This is not a bill to protect customers,” Augsburger said. ​“This is a bill to give the utility a new line of revenue and profitability.”