Energy Exchange

FirstEnergy Comes up Short on Pennsylvania Grid Modernization Plan


Imagine a utility receives $57 million from the Department of Energy and a matching amount from its customers, then uses that money to demonstrate how new technologies could save millions more. Sounds like a pretty sweet deal, right? Not if you’re FirstEnergy, whose business model doesn’t call for saving money.

FirstEnergy – serving several states in the Mid-Atlantic region, including Ohio where the power company is currently requesting a $4 billion bailout of its uneconomical power plants – recently filed a long-term infrastructure-improvement plan in Pennsylvania, setting out its strategy for modernizing the grid. And despite having seen the benefits firsthand, the utility didn’t include voltage optimization – or using technology to “right-size” the amount of voltage customers receive – in its plan.

Since utilities likely won’t modernize the grid on their own, Environmental Defense Fund (EDF) often intervenes before state public utility commissions. And in this case, EDF recommends the Pennsylvania Public Utilities Commission (PUC) should not approve FirstEnergy’s grid modernization plan unless it includes voltage optimization. Read More »

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New Report Confirms FirstEnergy’s $4-Billion Boondoggle

ieefa fe reportFirstEnergy’s plea to keep four aging power plants alive will cost Ohio customers almost $4 billion, according to a new study out today by the Institute for Energy Economics and Financial Analysis (IEEFA). The proposal is currently in front of the Public Utilities Commission of Ohio (PUCO).

The report, entitled A $4 Billion Bailout in the Buckeye State, outlines in clear terms how the utility giant hopes to force Ohioans to subsidize the continued operation of its outdated power plants, put customers on the hook for those plants’ escalating costs, and ensure future profits for FirstEnergy executives and shareholders. Read More »

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Debunking Silly Arguments for Utility Protectionism

2008_Weak_&_Strong_Arguments_BRYANS.jpegOhio utilities FirstEnergy and AEP, as readers of this blog know too well, want the Buckeye State to bail out their uneconomic power plants. Combined, their proposals before the Public Utilities Commission of Ohio (PUCO) would run Ohioans nearly $6 billion in increased costs. We understand where the companies’ greedy desire for subsidies comes from, but the arguments for them have become downright silly.

Let’s review why FirstEnergy and AEP’s bailout justifications don’t hold up: Read More »

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Why this Utility Giant’s $4-billion Coal Bailout is an Ill-Fated Energy Strategy

Clean energy investments are soaring worldwide, and the United States is no exception with $56 billion going toward renewable generation in 2015, an 8-percent increase over the year before.

So why are some utilities going against this trend – and risking a contest against more progressive competitors that are gaining market share at their expense?

To understand why, it helps to have a closer look at Ohio-based FirstEnergy, a large investor-owned energy company with operations in six states that has become the poster child for resistant utilities.

The FirstEnergy case also illustrates why companies that refuse change won’t be able to stop the rising clean energy tide, no matter how hard they try. Read More »

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The Business Case against FirstEnergy’s Bailout

Team of business people working together on a laptop

Reading testimony filed before any public utility commission can be a mind-numbing exercise. Comments often are filled with jargon, acronyms, and other elements indecipherable to an outsider.

But when it comes to recent remarks from Ohio corporations about FirstEnergy’s proposed bailout, which would prop up its outdated power plants for the next eight years, the filings are clear – and damning. The business community sees right through the unfair deal. Read More »

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FirstEnergy’s Bailout Isn’t Just Bad Policy – It’s Illegal

Gavel_iStock000003633182MediumLast week, the Public Utilities Commission of Ohio (PUCO) staff endorsed a four billion dollar bailout for FirstEnergy’s coal and nuclear plants. The new deal modifies FirstEnergy’s original proposal and, if approved, would prop up the Akron-based utility giant’s uneconomic power plants for the next eight years – making its customers foot the huge bill. Many parties oppose the deal, because it is unfair to customers and interferes with the state’s competitive energy market.

Importantly, FirstEnergy’s bailout is not only bad policy, it also violates federal law.

Ohio restructured its electricity market several years ago, so FirstEnergy’s plants have been operating in a competitive wholesale energy market. The market covers 13 states and power plants bid into an auction to supply electricity to the region, ensuring customers get the lowest electricity prices possible FirstEnergy’s power plants are losing money because they are old and inefficient, and can’t compete with newer, cleaner natural gas and renewable energy that deliver electricity at a lower cost. As a result, FirstEnergy has asked the PUCO for a bailout.

But electricity is sold across several states in the wholesale market, and so is subject to federal law. And federal law bars states from erecting protectionist barriers that harm competition. Read More »

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