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Bill proposes customers pay extra to attract a steel plant

Oct. 29, 2013 @ 12:00 AM

PORTSMOUTH, Ohio -- State Rep. Terry Johnson has introduced legislation to raise economic development funds by charging electric customers an extra fee to help bring a steel plant to Scioto County.

"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, a Republican from McDermott, said in a prepared release. "This bill would provide flexibility for New Steel as they attempt to secure capital for the project through a power purchase with a major electric provider."

New Steel has been looking into putting a steel plant in Southern Ohio for more than five years. The multi-million dollar project could bring an estimated 1,100 full-time jobs and a large number of construction jobs, developers say.

An estimate on how much the surcharge -- or rider, as Johnson called it -- would raise and how much it would cost electric customers isn't available, said Steven Alexander, a spokesman in Johnson's Columbus office.

"It would depend on what the Public Utilities Commission does," he said Monday.

The commission has the authority to allow a utility company to put a surcharge on customers' electric bills within its service territory for economic development purposes, according to a release from Johnson's office.

The bill would allow the electric provider to expand the area where the fee could be charged in Ohio, thus spreading the cost to more customers and lowering the per-customer fee, according to the release.

"I applaud him for his efforts," Bill Dingus, executive director of the Greater Lawrence County Area Chamber of Commerce, said of Johnson's efforts. "We've been working with Johnson on this. The bill would allow them to spread the rate" to other Ohio customers, he said.

New Steel could work out a power purchase agreement with a major utility, according to the release. 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 use over a set length of time, according to the release.

"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."

The bill's passage wouldn't guarantee the plant would be built, but would greatly increase the chances, Johnson said.

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