September 7, 2018 Read More →

FirstEnergy tries again to push Pleasants coal plant off its books

Energy News Network:

FirstEnergy wants to transfer a West Virginia coal plant into its bankrupt subsidiary’s portfolio, but the justification for the move is in doubt as the company seeks other coal plant closures.

On August 26, FirstEnergy Solutions’ Chief Restructuring Officer Charles Moore told the bankruptcy court in Ohio that “another coal-fired power station … would add purchasing power to enhance the value to the Debtors’ enterprise.” Yet FirstEnergy had already scheduled the Pleasants Power Station in West Virginia to close next year.

And just three days after Moore’s declaration, FirstEnergy Solutions announced it would close the Eastlake coal plant and remaining coal and diesel units at the Sammis plant in Ohio, along with 2,490 megawatts of capacity at the Bruce Mansfield coal plant in Pennsylvania.

At the same time, the company could reverse its decision if the federal government mandates support for fossil and nuclear generating plants. Either way, the timing raises questions about who benefits from the proposed transfer, and how it might affect consumers or taxpayers.

FirstEnergy tried last year to shift ownership of the Pleasants Power Station to its utility subsidiaries in West Virginia. However, an adverse ruling by the Federal Energy Regulatory Commission effectively scotched the deal.

“Generally speaking, Pleasants is not a competitive plant — which is why FirstEnergy decided to shut it down after failing at its attempt to transfer the costs to West Virginia ratepayers earlier this year,” said Cathy Kunkel, an energy analyst for the Institute for Energy Economics and Financial Analysis. Separating the plant out “is essentially an acknowledgement that the plant will be a drag on FirstEnergy’s earnings going forward,” she added.

“I agree that the announcement of shutting down the rest of the FES coal plants undermines the argument that Moore put forward about the value of Pleasants,” Kunkel said. “That said, I don’t understand how transferring Pleasants adds value to the deal from the perspective of the creditors.”

More: Coal closings may undermine FirstEnergy’s attempt to shift plant to bankrupt subsidiary

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