April 10, 2018 Read More →

FirstEnergy Is Losing Friends as It Campaigns for a Federal Bailout

Wall Street Journal:

FirstEnergy Corp. is waging a lonely fight as it seeks to persuade the Trump administration to bail out its struggling coal and nuclear-power plants through an unprecedented emergency action that experts say would effectively end America’s largest competitive electricity market.

The Ohio-based utility doubled down on coal and nuclear power in 2010 when it struck a deal to purchase Allegheny Energy Inc. for $8.5 billion, just as fracking in the nearby Marcellus Shale formation started to unleash a gusher of cheap natural gas that made gas-fired power plants a potent rival.

Now a FirstEnergy subsidiary in bankruptcy protection is calling on Energy Secretary Rick Perry to save it and other hobbled coal and nuclear generators in the Midwest from closure by forcing the operator of a 13-state competitive power market to take their electricity, regardless of whether it is the most financially sensible option.

Emergency orders have been used lightly—almost surgically—in the past to keep one or a few plants running. The emergency order requested by FirstEnergy Solutions Corp., if approved, would affect a whole class of power generators across a large, multistate region and set an important precedent.

The request poses a test for the Trump administration, which has pledged to resuscitate the nation’s coal industry. Several power companies supplying the market oppose the proposal, with some arguing FirstEnergy’s distress is of its own making.

While other power generators have closed uneconomic facilities and diversified to include more gas and renewables, FirstEnergy Solutions remains heavily dependent on coal and nuclear power, which combined make up 88% of its generation mix.

“FirstEnergy doesn’t want to evolve,” said Abraham Silverman, vice president of regulatory affairs at NRG Energy Inc., which operates several coal plants in the competitive power market and opposes the FirstEnergy request. Mr. Silverman added: “They’d rather go to the regulators and ask for a bailout.”

More ($): Ohio Power Company Has Few Allies in Bailout Bid

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