Why It Matters
A consumer advocacy organization in Ohio is raising concerns about programs that allow aging coal-fired power plants to remain profitable despite high operating costs, arguing the policies inflate electricity bills for residents and discourage investment in newer generation capacity across the region’s power grid.
What Happened
The Citizens Utility Board of Ohio released a report examining three mechanisms that allow coal plants to recover costs and remain operational: state-level financial support delivered through utility fees and rate riders, payments within the PJM regional grid system, and reliability-must-run contracts from PJM Interconnection—the 13-state transmission operator serving the Mid-Atlantic and Midwest.
The report flags Ohio House Bill 6, which had provided subsidies to Ohio Valley Electric Cooperative’s coal facilities through rider mechanisms, as an example of cost-recovery support. The state later repealed those subsidies through House Bill 15, removing the rider program.
Despite that action, the board argues that other cost-recovery tools continue to shield aging coal plants from market pressures. Tom Bullock, executive director of the Citizens Utility Board, framed the dynamic in operational terms: “Without change, we are operating the market with one foot on the accelerator and one foot on the brake. Consumers should not be forced to subsidize inefficiency.”
The report contends that sustained subsidy mechanisms prevent clearer economic signals that would normally encourage retirement of inefficient facilities and attract capital toward newer power generation. Bullock used a sports analogy to describe the competitive distortion: “The old players are being allowed to juice their performance. And what that does is it displaces the younger players that might come in on the roster and rejuvenate the team.”
By the Numbers
7 — number of coal power plants operating in Ohio
1955 — year the oldest Ohio coal plant began operation
1990 — year the youngest Ohio coal plant began operation
13 — number of states served by PJM Interconnection
Zoom Out
Aging coal infrastructure across the nation has become a focal point in debates over grid reliability and energy policy. States and regional operators face competing pressures: maintaining dispatchable generation capacity that can respond to demand spikes versus retiring high-cost facilities that consume ratepayer funds without delivering competitive wholesale power prices.
The PJM region, which stretches from New Jersey to Illinois, has grappled with similar tensions. Reliability-must-run contracts and cost-recovery mechanisms exist partly to preserve generation assets that grid operators view as necessary for stability during peak demand or when transmission constraints limit power flow. Consumer advocates and market-oriented analysts argue that such arrangements can lock in inefficiency and reduce pressure for technological advancement.
What’s Next
The Citizens Utility Board is calling for greater transparency in cost-recovery mechanisms, clearer principles for allocating recovery costs among ratepayers, and heightened scrutiny before allowing utilities to maintain long-term use of subsidy tools. The report also recommends streamlining regulatory processes to accelerate approval timelines for new power plants, aiming to make investment in modern generation more attractive to operators.
Ohio regulators and the state legislature will likely weigh these recommendations as utilities seek approval for rate changes and cost recovery in upcoming proceedings.