AEP, Other Ohio Utilities Could Own Nuclear Power Plants Under State Bill

Why It Matters

The measure could reshape Ohio’s electricity market by shifting nuclear project risk onto ratepayers, while giving major utilities a new revenue stream and accelerating nuclear deployment in a region hungry for reliable power.

Key Takeaways

• AEP, FirstEnergy may own Ohio nuclear plants under H.B. 862
• Customers must sign 20‑year contracts to fund nuclear projects
• PUC approval auto‑granted if deadline missed, easing permitting
• Ohio's $100 million JobsOhio program backs SMR siting and manufacturing

Pulse Analysis

Ohio’s utility landscape has long been defined by a prohibition on utility‑owned generation, a rule that was reinforced after the controversial HB 6 scandal. H.B. 862 seeks to carve out an exception for nuclear power, mandating that only customers who commit to a 20‑year off‑take contract bear the construction and operating costs. By tying project approval to a statutory deadline—where a missed deadline automatically grants approval—the bill reduces regulatory friction but also raises concerns about unchecked utility expansion funded by ratepayers.

For American Electric Power, the legislation dovetails with its broader SMR strategy, which targets high‑growth data‑center corridors in Indiana and Virginia. The bill’s provision to add nuclear projects to a utility’s rate base, coupled with construction‑work‑in‑progress cost recovery, offers a stable financing structure that could attract private capital and federal loan guarantees. However, the requirement that only contracted customers pay for the plant’s output means that any mis‑forecast of demand could leave non‑contracted ratepayers exposed to higher bills, especially if market electricity prices fall below the plant’s operating cost.

Nationally, the Ohio move reflects a resurgence of interest in nuclear as a low‑carbon baseload resource, especially as states grapple with renewable integration challenges. Critics, including the Ohio Manufacturers’ Association, argue the bill reverts to a monopoly model that places speculative risk on consumers. If enacted, the policy could set a precedent for other states seeking to revive nuclear while navigating the delicate balance between energy security, cost allocation, and regulatory oversight.