Dive Brief:
- The future of FirstEnergy is at stake, according to the company's CEO, if Ohio regulators and lawmakers cannot find a way to financially support its nuclear and coal facilities in the state.
- While the company is not pressing re-regulation legislation yet, CEO Chuck Jones said the first step is for the Ohio Public Utilities Commission to approve pending rate cases that would have customers cover costs at the company's plants.
- The generator has asked ratepayers to subsidize operations at a handful of plants, and is awaiting a decision from state regulators regarding its Davis-Besse nuclear plant and the coal-fired H.R. Sammis facility.
Dive Insight:
FirstEnergy's public relations offensive to support its case for taxpayer assistance to support uneconomic Ohio power plants continues, with CEO Jones sitting down with the Cleveland Plain Dealer to explain why the “bailout,” as opponents refer to it, will ultimately be good for consumers.
On the subject of a potential return to regulated electricity markets, Jones told the newspaper: "I would do it in a heartbeat. … I think it makes sense. I am trying to save a company."
FirstEnergy advocated for deregulating markets less than a decade ago, but that was in an era of higher gas prices, when its coal and nuclear plants were more competitive. But gas prices are about a quarter of where they were just seven years ago, and FirstEnergy's generation fleet has come under pressure and some plants may be forced to close.
Last month consumer advocates alleged the company was adding new provisions to its rate case, in exchange for more than a dozen parties agreeing to not oppose the power arrangements. Consumer advocates worry residential customers will wind up footing the bill for industrial power users.
But FirstEnergy says its plan will be cheaper – in the long-term – for consumers, as natural gas prices will eventually rebound. While the first three years would be more expensive, the company believes that across more than a decade the proposal will save conumers $2 billion. Opponents say the plan will wind up costing an extra $3 billion.
