August 23, 2017 Read More →

FirstEnergy Falters in Ohio Campaign for Bailout of Its Failing Power Plants

Cleveland Plain Dealer:

Neither the Trump administration nor Gov. John Kasich is inclined to give FirstEnergy’s struggling power plant company a free pass around competition, even as the number of competitors is increasing and the subsidiary faces bankruptcy.

FirstEnergy Solutions, the unregulated power plant subsidiary that does business in wholesale and retail markets, is negotiating with its creditor. Standard & Poor’s has further reduced the bond credit rating of the subsidiary, reasoning that a bankruptcy filing is inevitable because the old plants cannot compete against new gas turbines.

The first of 10 large gas-turbine power plants already approved by the state officially opened this week, generating nearly 900 megawatts of power — about the same as FirstEnergy’s nearby Davis-Besse nuclear plant. The Oregon Clean Energy Center in suburban Toledo is selling that power directly into the regional high-voltage grid’s competitive market, where Davis-Besse must compete as well.

Similar-sized gas turbine plants are under construction in Lordstown, in Carroll County and in Butler County. The plants are said to be twice as efficient as Davis-Bess and are cheaper to run, at least for now.

The Ohio Power Siting Board has approved another plant in Columbiana County and a fifth one in Monroe County. Applications are pending for three more plants and another is in a “pre-application” phase.

Against this backdrop, Kasich this week said flatly he does not support FirstEnergy’s proposal before Ohio lawmakers to create “zero emission credits,” or ZECs, for its two nuclear power plants in recognition that the Davis-Besse and Perry nuclear plants do not produce carbon dioxide. The proposal, labeled a “bailout” by opponents, is stuck in legislative committees.

The ZECs would run for about 17 years, subject to periodic state review, initially raising total customer bills by about $300 million a year. Average consumer bills would increase by $5 a month, says the company.

The company has been clear that even if the ZECs are enacted, it hopes to sell Perry and Davis-Besse, and all of its power plants, if it has to sell power in competitive markets.

Kasich’s pro-market position appears to mirror the newly emerging position of the U.S. Department of Energy and the White House which, according to wire reports, have refused to declare a federal emergency to “save” old coal-fired plants and therefore save coal mining jobs as the president promised during his election campaign.

FirstEnergy Solutions owns two of FirstEnergy’s big coal-fired plants, the W.H. Sammis plant in Straton, Ohio, on the Ohio River, and the Bruce Mansfield plant in Shippingport, Pa.

FirstEnergy’s other large coal plants are owned either by subsidiary Allegheny Energy Supply, which is not known to be contemplating bankruptcy, or to MonPower, a regulated West Virginia utility.

More: FirstEnergy power plant bailouts rebuffed by state and federal leaders

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