Energy Exchange

FirstEnergy Can’t Hide Any Longer

By Dick Munson / Published: July 30, 2015

Over the past few months, I have written a good deal about FirstEnergy, the massive electric utility serving customers across six states, and specifically its attempts to saddle Ohioans with the cost of its risky investments. The company has asked the Public Utility Commission of Ohio (PUCO) to guarantee profits for its uneconomic power plants through customer-funded subsidies.

FirstEnergy has also prevented opponents of its bailout from examining all relevant information to the case, including the credibility of its key witnesses. But, last week, the PUCO rejected these attempts to hide information about FirstEnergy’s embattled $3 billion proposal. As we near the start of the proposed bailout hearings on August 31^st, this decision is a victory for transparency – and places the utility’s proposal on shakier ground than ever.

The full story involves a consultant – Judah Rose of ICF International – who FirstEnergy hired to justify the bailout. Rose was asked to project future electricity market prices, which would determine the economic value of the power generation plants in question. This contributed to how FirstEnergy settled on the figures for its bailout request. Read More »

Also posted in Clean Energy / Comments are closed

FirstEnergy Clings to the Energy Past

By Dick Munson / Published: July 9, 2015

All around the country, we are seeing signs of innovation when it comes to the electricity industry. The state of New York is performing a comprehensive review of related technologies and business practices, Illinois is modernizing the electric grid and empowering customers to save energy by creating transparency around smart meter data, and the wind industry in Texas continues to set new records. The U.S. grid is truly beginning to evolve from the system Thomas Edison created 100 years ago, moving toward a more flexible grid that runs on clean, renewable resources.

Yet some players – with significant revenue and power – are not on board. FirstEnergy, the Akron-based utility giant, has been clinging to the past and waging war on clean energy in Ohio, as I explain in my op-ed published today in the Akron Beacon Journal. The Beacon Journal is the hometown newspaper of FirstEnergy’s headquarters. Read More »

Also posted in Clean Energy, Energy Financing, Renewable Energy / Read 2 Responses

FirstEnergy Campaign Gets Graphic: EDF Launches Online Ads, Reaches Millions

By Dick Munson / Published: June 2, 2015

FE300_V1 In the past few weeks, I have written extensively on the $3 billion bailout proposed by FirstEnergy, the giant utility that provides electricity across Ohio and multiple other states. For those of you who want to catch up on what FirstEnergy is up to and why the proposal is such a bad idea, take a look at our recent blog posts on the topic.

But we haven’t just written about FirstEnergy’s nefarious antics. A few weeks ago, Environmental Defense Fund (EDF)began running online ads in local Ohio markets and on some of the web’s most influential financial news sites. Since we launched, our ads have generated more than 2 million impressions on computers, tablets, and phones across the country. And, we’re just getting warmed up.

Thank you to the nearly 1000 EDF members who have already urged the Public Utility Commission of Ohio to reject FirstEnergy’s proposed bailout. If you see one of the below ads online, we hope you consider taking the same action! Read More »

Also posted in Clean Energy / Comments are closed

Debunking FirstEnergy’s Bailout Arguments

By Dick Munson / Published: May 26, 2015

FirstEnergy, the giant Ohio-based company that owns power plants and transmission lines in several midwestern and northeastern states, is running out of arguments for its proposed bailout.

The Public Utility Commission of Ohio (PUCO), which is currently considering the proposal by FirstEnergy for substantial, customer-funded subsidies to bail out its uneconomic power plants, has suggested the utility must prove four points.

Financial need

As we all know, need is different than want. And with a balance sheet showing $12.4 billion in shareholder equity, clearly the giant utility is able to keep these plants open. But FirstEnergy and its shareholders are reluctant to subsidize their own risk – instead, they want Ohio customers to take on the cost and associated risk. Strike one. Read More »

Also posted in Clean Energy, Energy Efficiency / Read 2 Responses

FirstEnergy Will Raise Rates to Recoup Bad Bets on Coal

By Dick Munson / Published: May 13, 2015

FirstEnergy, the giant Ohio-based company that owns power plants and transmission lines in several midwestern and northeastern states, is ready to raise electricity prices for its customers. This is in part because three of its oldest coal-fired power plants are set to close, but also because of a few bad business bets.

Though finally shuttered this week, the three plant closures were announced in January 2012 so FirstEnergy could take advantage of a power auction planned by PJM Interconnection, the power grid operator in the Mid-Atlantic region. That auction determines the most efficient power plants to serve this region for the next three years.

By taking these old and dirty units out of the auction, FirstEnergy was able to push up prices for its other power plants.

At the time, environmentalists argued FirstEnergy should account for the efficiency gains that would result from state-mandated programs. Lower demand for electricity caused by efficiency improvements would have reduced the auction price for power. Although such energy efficiency is typically “bid” into PJM auctions in the same way coal or nuclear energy is, FirstEnergy refused. Read More »

Also posted in Clean Energy, Energy Efficiency, Ohio / Comments are closed

Creative Utility Accounting: Estimating the True Cost of a Subsidy

By Dick Munson / Published: May 7, 2015

$5 billion is a lot of money, yet that’s the difference in cost estimates between an Ohio-based, consumer advocacy group and FirstEnergy for the utility’s proposed bailout plan.

FirstEnergy, the giant Akron-based company that owns power plants and transmission lines in several midwestern and northeastern states, calculates its proposed plan to raise electricity rates will eventually save Ohio customers $2 billion. The Ohio Consumers’ Counsel, in contrast, estimates the subsidies will cost Ohioans $3 billion.

To appreciate the differences, consider a little history.

Several years ago, FirstEnergy thought it could profit in emerging regional electricity markets, so it convinced regulators to allow it to set up a separate subsidiary that would generate and sell electricity. That unit was to be independent from another subsidiary company, which managed the power wires and delivered power to customers. This partial step toward free markets, however, didn’t work out too well for FirstEnergy. Now, it’s asking regulators to abandon competition. Read More »

Also posted in Clean Energy, Ohio / Read 3 Responses