By Frank Lewis
October 29, 2013
PDT Staff Writer
State Representative Terry Johnson (R-McDermott) introduced legislation on Thursday Johnson, that, while not guaranteeing that the proposed New Steel plant will be built, does greatly increase its odds of being built. House Bill 312 would alter the allowable scope of an economic development rider approved by the Public Utilities Commission.
“I have made a promise to my constituents to leave no stone unturned when it comes to bringing a steel plant to our area,” Johnson said. “This bill will provide flexibility for New Steel as they attempt to secure capital for the project through a power purchase agreement with a major electric provider.”
Under current Ohio law, the PUCO can allow a utility company to put a rider on the consumers’ electric bill within its service territory for economic development purposes. This rider can only be imposed on its customers. HB 312 would still allow the PUCO to approve such a rider but the cost would no longer be contained solely within the electric company’s service territory thereby lowering the per person cost.
Johnson said New Steel could use this new ability to work out a power purchase agreement with a major utility. Such a deal would involve receiving the money for the plant’s construction up front, with New Steel paying the electric provider back with a predetermined amount of electricity the plant would generate over a set length of time.
“The hang up with this type of deal is that a public utility company will want a mechanism in place to hedge their risk since they would be providing a lot of cash up front,” Johnson said. “This policy change would make it much easier to arrange a power purchase agreement so the plant can be built while still protecting Southern Ohio’s electric customers from high bills.”
One of the necessities for the plant, should it be built, is a power company to purchase the excess electricity that would be generated at the location and New Steel originally had an agreement with Duke Energy, but as time passed and Duke Energy became involved with a more pressing issue - that of completing their merger with Project Energy - the discussion seemingly took a back seat. That merger was completed and Duke Energy then began to concentrate on the proposed rate increase requested from the PUCO, which they received earlier in the year. At last discussion, New Steel was continuing to talk with Duke.
Over the last several years, regional entities have worked to try to help New Steel move everything that stands in their way to try to assure that the plant would be built in Franklin Furnace. Several citizens ponied up last year to come up with the money to do a required Hatch Study which deals with the feasibility of the operation. The study cost approximately $500,000, and local individuals came up with $200,000, and Bill Dingus of the Lawrence Economic Development Corporation announced that organization had come up with the final $60,000 to make the study possible.
“If I had the capital and ability to singlehandedly make this plant a reality, we would have broken ground already,” Johnson said. “But I will do everything I can in my capacity as state representative to turn the tide of the chronic job loss we’ve seen in Scioto, Lawrence, and Adams Counties for decades.”
The New Steel Plant would bring an estimated 1,100 permanent jobs to Southern Ohio plus a large number of construction jobs and the overall boost to the economy that comes with having a large manufacturing employer in the area. House Bill 312 is awaiting referral to a House standing committee.
Frank Lewis may be reached at 740-353-3101, ext. 252, or at email@example.com. For breaking news, follow Frank on Twitter @FrankLewisPDT.