FirstEnergy wants Ohio consumers to subsidize its coal plants

Dive Brief:

Ohio consumer groups are wary of a proposal from FirstEnergy's that would see consumers guarantee income from its coal power plants. The ratepayer subsidies will cost the average consumer about $3.50 a month in the first year, according to the power company.
According to the Office of the Ohio Consumers' Counsel (OCC), the plan could cost customers an
additional $3 billion over the life of the 15-year agreement.
But FirstEnergy, which says the plan is necessary to keep the plants operating and the power supply reliable, estimates consumers could save $2 billion under the proposal. Company officials say that after the first year, consumers would begin receiving $2 monthly credits on their bills.

Dive Insight:

Public hearings began this month regarding FirstEnergy's proposal to keep several facilities operating despite being unprofitable at times. The Marion Star reports on wildly varying estimates on the plan's cost: The company believes it could save consumers $2 billion over the next 15 years, while the OCC sees a $3.1 to $3.2 billion cost.

A spokesman for FirstEnergy told the newspaper the plan would cost the average customer $3.51 per month in the first year but would eventually turn to a bill credit.

In its application, FirstEnergy proposed securing all supply needed for its standard service offer for Ohio Edison, Toledo Edison and The Cleveland Electric Illuminating companies through a competitive bidding process. State regulators have developed a web page explaining that FirstEnergy proposes to conduct six auctions over a three-year period for products of one to three years in length.

Under the proposed agreement, the companies would acquire generation from their share of Ohio Valley Electric Corp. and generation from the Davis-Besse and W.H. Sammis plants and then sell that capacity back to the PJM market. A new rider would include the net costs associated with legacy contracts, capital investments and credit the revenue from selling the capacity, energy and ancillary services from the three plants into the PJM market.