State Energy Bailouts Pose More Urgent Threat Than Green New Deal | Citizens Against Government Waste
The WasteWatcher: The Staff Blog of Citizens Against Government Waste

State Energy Bailouts Pose More Urgent Threat Than Green New Deal

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


The Green New Deal and its associated hyperbole have commanded most of the recent attention that is paid to energy policy.

Yet the Green New Deal has no chance to pass until 2021 at the earliest; even its Senate sponsor, Ed Markey of Massachusetts, says he won’t vote for it when Majority Leader Mitch McConnell brings it to the floor for a vote, claiming it is only a vote designed to make Green New Deal supporters look bad. 

One overlooked component of the debate about energy policy involves less fantasy, less overheated rhetoric, and greater potential for real damage to taxpayers in the short term: states are considering hefty bailouts to failing nuclear plants.  These decades-old plants have lost their competitive edge against more efficient natural gas and renewable forms of energy.

One of these states is Pennsylvania, which has long been a leader in nuclear energy.  It is the home of Three Mile Island Generating Station, site of the infamous 1979 meltdown.  That plant and one other, Beaver Valley Nuclear Power Station, are scheduled for closure.  Pennsylvania legislators, however, are attempting to prop up these failing nuclear plants by modifying the 2004 Pennsylvania Alternative Energy Portfolio Standards Act (AEPS) to reclassify the plants as “zero emission.” 

When Pennsylvania deregulated its energy market in 1996, consumers and businesses experienced increased competition, greater choice, and lower energy prices.  The proposal to prop up these failing nuclear plants would increase the cost of energy and distort the energy market that was supposed to be a free one.

Another such state is Ohio.  FirstEnergy Solutions, a subsidiary of the powerful FirstEnergy corporation, filed for bankruptcy in April 2018.  The bankruptcy was hardly a surprise, considering the massive financial problems that arose from FirstEnergy Solutions’ inability to stay competitive in the energy market.  During the 2018 election cycle, FirstEnergy made huge contributions to Ohio legislative candidates, paying particular attention to important primary elections and the campaigns of committee chairs, and taking sides in a heated race for House Speaker between two Republicans. 

Now, FirstEnergy is advocating for a massive taxpayer bailout to its two Ohio nuclear plants, and legislators to whom it provided campaign contributions seem willing to comply with the pressure.  A bill to provide a bailout failed in 2017, but similar legislation is set to be introduced soon.  It would subsidize these failing nuclear plants owned by the bankrupt company, adding an extra $30 to the annual bill of every ratepayer to provide this $2.5 billion subsidy. 

What’s the big deal?  The big deal is that America’s energy and environmental challenges will be solved only through policies that competitively meet the energy demands of today, adapt to the growing demand and changing preferences of tomorrow, and ensure a level playing field instead of picking winners and losers through subsidies and bailouts. 

The media, politicians, and the general public should pay less attention to the Green New Deal and more attention to giant bankrupt energy companies seeking welfare directly from hardworking taxpayers.

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