Dive Brief:
- FirstEnergy this week filed a rehearing request with the Public Utilities Commission of Ohio, arguing that a distribution modernization rider (DMR) approved in October is insufficient to help it tackle capital projects or access financial markets, SNL Energy reports.
- Regulators last month rejected the utility's proposed virtual power purchase agreement, and instead set the DMR at $132.5 million annually for three years, with the possibility of a two-year extension.
- FirstEnergy had proposed $558 million per year for eight years, and SNL Energy reports that the company told regulators the shorter time-frame will inject unnecessary uncertainty into its finances.
Dive Insight:
PUCO's October decision to approve a $204 million grid modernization charge didn't seem to satisfy anyone. Environmentalists saw it as just another way to support the company's struggling generation, and the utility says it isn't enough to get the job done.
FirstEnergy said earlier this month it is considering selling 13 struggling power plants, including several nuclear plants. The company is now working with American Electric Power to push for the state's energy markets to be re-regulated.
It is also taking its case back to regulators, arguing that the plan approved doesn't take into account the benefits of grid modernization or the company's long-term financial obligations. SNL says the company reminded PUCO that it has pension-funding obligations in excess of $1 billion on the horizon.
But the company is not waiting for an answer. While it is also working to have the state's energy markets re-regulated, it is also looking to sell its generation. The Plain Dealer reports FirstEnergy CEO Chuck Jones told analysts this week, "we are not going to wait on those states to decide what they want to do," referring also to Pennsylvania, where the company has power plants.
"We have made our decision that over the next 12 to 18 months we will exit competitive generation and become fully regulated," Jones said.
FirstEnergy's initial proposal included a much larger range of power purchase agreements, but proposals have been scaled back since the Federal Energy Regulatory Commission rejected those agreements in April.
