Ohio Senate passes bill to save state's two nuclear power plants

(Reuters) - The Ohio Senate passed a bill on Wednesday that will create financial subsidies to stop the state’s two nuclear power reactors from retiring early, according to market analysts tracking the legislation.

The two reactors in Ohio, Davis-Besse and Perry, are owned by FirstEnergy Solutions, which has said it would shut the money-losing plants in 2020 and 2021 unless the state provides some financial assistance to keep them operating.

FirstEnergy Solutions is a bankrupt unit of Ohio power company FirstEnergy Corp .

The Senate version of the nuclear bill, House Bill 6 (HB6), is expected to go to the state House of Representatives for a concurrence vote on Wednesday night, one of the analysts said. The House has an “if needed” session scheduled for Thursday if members need more time to debate the Senate changes to the bill. HB6 passed the House in May.

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The senate passed the bill after an amendment which postpones nuclear subsidies by one year, according to an analyst.

The earlier version of the bill was designed to reduce consumer power rates by weakening the state’s renewable and energy efficiency goals even though FirstEnergy Solutions would receive an estimated $150 million a year from 2020-2026 to keep its reactors in service.

“We expect the legislature will hit this deadline and send the bill to Governor Mike DeWine’s desk this week,” Josh Price, senior analyst at Height Capital Markets in Washington, said earlier on Wednesday.

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Officials at FirstEnergy Solutions had no comment earlier Wednesday. The company has said it needed the bill to pass by July 17 to avoid shutting the Davis-Besse reactor next spring.

FirstEnergy Solutions has warned that shutting the reactors could result in the loss of 4,300 jobs.

On Monday, U.S. electric generator LS Power warned it would be forced to terminate development of an expansion of its Troy natural gas-fired power plant in Ohio if the state passes legislation to subsidise nuclear energy.

LS Power said the expansion of the Troy plant would create hundreds of jobs during construction and about 20 permanent positions. Analysts, however, said that was likely not enough to offset legislators’ concerns about the potential loss of thousands of jobs if the reactors shut.

Gas-fired plants would likely make more money if the reactors shut because they would operate more often.

(Reporting by Scott DiSavino and Sumita Layek; Editing by Susan Thomas and Grant McCool)

This story has not been edited by Firstpost staff and is generated by auto-feed.