Davis-Besse plant may be closed in cost-cutting move
CARROLL TOWNSHIP – The Davis-Besse Nuclear Power Station — along with its hundreds of high-paying jobs and the millions in tax dollars it generates for the surrounding community — could soon be closed.
Akron-based FirstEnergy Corp., which owns the plant, is planning to sell or close the plant and several others in 2017 or early 2018 unless state officials change energy regulations that would make it financially feasible to keep the plants running, said CEO Chuck Jones in an industry conference. And it looks unlikely that the state would take those measures, he said.
“We have made our decision that over the next 12 to 18 months we’re going to exit competitive generation and become a fully regulated company,” Jones said. “We are not going to wait on those states to decide what they are going to do there.”
But a crucial question is whether the plant will be sold — and kept open — or shuttered in a move that would slash jobs and tax revenue.
While a buyer of the plant would likely keep it running, Davis-Besse’s small size could make it harder to sell, said Charles Fishman, an analyst with Chicago-based Morningstar Inc. who covers FirstEnergy.
“That puts Davis-Besse a little more at risk than some of the others, but I still think there is a 50-50 chance someone buys it,” Fishman said.
An outright closure could be devastating for the communities surrounding the plant, which is located near the shore of Lake Erie in Ottawa County. Davis-Besse, which began generating electricity in 1977, was Ohio’s first nuclear power plant. It has a 900 megawatt generating capacity, enough to power 1 million homes, according to FirstEnergy.
“Closure of Davis-Besse would have significant economic impact on local and regional employment, as the plant also has several hundred contractors onsite everyday,” said Jamie Beier Grant, director of the Ottawa County Improvement Corp., an economic development body.
The plant also generates millions of dollars in tax revenue, said Ottawa County Auditor Larry Hartlaub.
For the 2015 tax year, Davis-Besse generated $10,212,988 in property and utility tax income, Hartlaub said. Of those funds, approximately $1.6 million went to county agencies or departments, $817,000 to Carroll Township, $7 million to the Benton-Carroll-Salem School District, $654,000 to Penta Vocational School, and $204,000 to the Oak Harbor Library, Hartlaub said.
The plant employs 624 people, FirstEnergy spokeswoman Stephanie Walton said. Employees at the plant took home an average of approximately $86,000 per year before benefits, according to a 2015 economic study of Davis-Besse by the Nuclear Energy Institute, a nonprofit organization that promotes nuclear power. An additional 4,600 workers, such as contractors, are tied to the plant in some way, the report said.
FirstEnergy remains cognizant of the local effects closures could have, Jones said at the November investor conference.
“We have 3,500 employees that work at those facilities and anything we can do to work with those states to ensure a secure future for those employees and ensure that these generating plants are around to serve customers for a long time, we are going to try to do,” he said. “Even though there is a significant potential FirstEnergy is not going to be the long-term owner of these generating units.”
The company has not provided more detail of when in the next 18 months it might move to sell or shutter 13 plants across Ohio and Pennsylvania, but FirstEnergy is likely to make the moves as soon as possible for financial reasons, Fishman said.
Beier Grant said she is actively engaged in conversations with Davis-Besse plant leadership, along with local and state officials regarding the plant’s future, but would not speculate on an outcome.