The Ohio Supreme Court provided a glimmer of hope last week for opponents of state House Bill (HB) 6, which mandates $150 million in annual subsidies over seven years for two nuclear power plants in the state, and is therefore seen as a threat to natural gas-fired power generation.
The high court granted a request from a U.S. District Court to answer five questions related to a proposed referendum challenging the bill, which was passed into law by the Republican-controlled state legislature in July. By granting the request, justices have preserved the possibility that the law propping up the nuclear plants could be reversed via referendum in November.
The local natural gas industry has fought vigorously against HB 6, arguing that it amounts to a “bailout” for nuclear power plants that would not be able to compete against cheaper, gas-fired generation if not for subsidies.
The Ohioans Against Corporate Bailouts (OACB) group is seeking to place a referendum on the November ballot that would ask voters to accept or reject HB 6, which provides financial assistance to the 900 MW Davis-Besse and 1,268 MW Perry nuclear plants owned by FirstEnergy Solutions Corp., which filed for bankruptcy last year.
OACB failed to collect enough signatures for a petition to place the referendum on the November ballot, coming up short by about 45,000 signatures. However, OACB claims that it was denied the full, constitutionally mandated 90-day period after the bill was signed into law to collect the signatures.
OACB filed a lawsuit with the U.S. District Court for the Southern District of Ohio asking for an additional 38 days to gather the remaining signatures. The district court deferred to the state Supreme Court to decide whether the Ohio Constitution guarantees a full 90 days solely for the purpose of collecting signatures.
If the court were to decide this is not the case, “it would appear that OACB’s fight against HB 6 would fail,” analysts at ClearView Energy Partners LLC said in a note to clients on Thursday.
If justices were to conclude that the constitution guarantee those rights, supporters of the petition would have 38 days to collect the roughly 45,000 signatures still needed.
“By our read…the Ohio Constitution does not explicitly require a full 90-day period for referendum seekers to collect signatures,” analysts said. “We think the constitution may only explicitly require that parties that seek a referendum must file the petition signed by 6% of voters within 90 days after the governor signs the law.”
If OACB were to obtain a favorable ruling from the high court and collect the remaining signatures by the deadline, the group would then need to garner support from a plurality of voters to overturn HB 6 in the November election.
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