Dive Brief:

• The financial situation at FirstEnergy Corp. shows little sign of reversing, according to analysis out last week by the Institute for Energy Economics and Financial Analysis (IEEFA), which said the company is turning to ratepayer bailouts to survive.
• The company's stock price is off about 30% in the last two years, and critics say FirstEnergy's reliance on coal generation is partly to blame.
• According to the Akron Beacon Journal, however, FirstEnergy said it has the right strategies in place and a "commitment to operational excellence and financial discipline."

Dive Insight:

IEEFA describes the company "in near free fall," and analysts say that is due in part to its 2011 acquisition of Allegheny Energy, a mostly coal-fired electricity company that has turned out to be vulnerable to better-diversified competitors.

“FirstEnergy’s political strategy — calling for continued reliance on coal-fired and nuclear power generation and opposition to competing sources of power — is based on a mischaracterization of the fundamental challenge facing the utility industry. What worked in the past is unlikely to work in the future," the report said.

FirstEnergy believes it is making changes that will improve its financial situation. The company reportedly called the analysis “misleading and biased," and told the Akron Beacon Journal, “we believe the strategies we have put in place, together with our commitment to operational excellence and financial discipline, will provide long-term value and predictable, sustainable growth to our investors.”

According to the report, FirstEnergy cut shareholder dividends by 35% earlier this year and increased short-term annual debt obligations by 21% from 2012 to 2013.

"FirstEnergy’s latest proposed regulatory bailout is its pending request to the Public Utilities Commission of Ohio asking ratepayers to subsidize the continued operation of its W. H. Sammis coal plant, its Davis-Besse nuclear plant, and its share of the OVEC coal plants," the report said.