(Reuters) - The Ohio Senate will likely pass a bill on Wednesday that will create subsidies to avoid the early shutdown of the state's two nuclear power reactors, according to analysts and those watching 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.
Analysts said the Senate version of the nuclear bill, House Bill 6 (HB6), would likely pass the Senate Energy and Public Utilities and the Senate Rules and Reference Committees before going to the full Senate for a vote.
"If the Senate passes HB6 later today as expected, the bill will go over to the House for a concurrence vote," said Josh Price, senior analyst at Height Capital Markets, noting the state 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.
The current version of the bill would provide an overall reduction in 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.
Officials at FirstEnergy Solutions had no comment at this time. The company has said it needed the bill to pass by July 17 to avoid shutting the Davis Besse reactor next spring.
"We expect the legislature will hit this deadline and send the bill to Governor Mike DeWine's desk this week," said Price at Height Capital Markets.
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 subsidize 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.