Energy Exchange

Ohio Regulators Attempt to Keep FirstEnergy Afloat with New Subsidy Proposal

By Dick Munson / Published: July 11, 2016

Smokestacks My head feels whipsawed by the wildly changing proposals to bail out FirstEnergy’s uneconomic and dirty power plants. The latest development in this ongoing saga occurred June 29, when the Public Utilities Commission of Ohio (PUCO) staff recommended a new subsidy solution for the utility behemoth: $131 million per year over three years.

While this proposal is, blessedly, 90 percent less than FirstEnergy’s original $4 billion bailout proposal, it’s still an unnecessary subsidy that Ohio taxpayers should not be forced to shoulder. Hearings on whether the PUCO commissioners should approve the deal begin today.

Posted in FirstEnergy / Comments are closed

Rubber-Stamp Regulators: Ohio Gives FirstEnergy Another Go-Ahead

By Dick Munson / Published: May 11, 2016

approved-pixabay At least in theory, government officials are supposed to monitor electric utilities and ensure they do not abuse their monopoly power. For more than a century, these independent regulators have protected customers from unfair, above-market prices and provided a check on giant corporations.

That social contract is being tested in Ohio.

In an unprecedented move, the Public Utilities Commission of Ohio (PUCO) today allowed FirstEnergy to seek a new power plant bailout – a full day before opponents were to offer their objections. So, without listening to the arguments against the deal, the PUCO rubberstamped the utility’s request for a rehearing.

Unfortunately, this is not the PUCO’s first rubber-stamping. FirstEnergy’s original proposal would have forced customers to pay $4 billion to subsidize the utility’s old and dirty power plants, which could no longer compete in the market. That proposal was almost laughable since the power plants were not needed, and certainly not at such a high price – other companies proposed to offer the same amount of electricity at significantly lower prices. Read More »

Posted in FirstEnergy, Ohio / Read 3 Responses

A Bailout by Any Other Name: FirstEnergy Still Trying to Stick It to Ohio Customers

By Dick Munson / Published: May 4, 2016

handshake_iStock_000000409076_L3 You have to give some credit to FirstEnergy. It does hire creative lawyers.

After the Federal Energy Regulatory Commission (FERC) effectively killed the utility giant’s $4-billion bailout request to keep its uneconomic power plants online, those expensive attorneys figured they could redefine a few words and restore the subsidies. In an attempt to thwart FERC’s decision, the utility is asking the Public Utilities Commission of Ohio (PUCO) to consider “modifications” to its bailout plan. However, these changes will still result in increased customer bills at the rate of $4 billion.

For almost two years, FirstEnergy argued it needed to prop up its uneconomic generators with “power purchase agreements” (PPA) between the utility and its affiliate companies. After federal regulators declared such transactions were illegal because they distorted competitive markets, FirstEnergy lawyers are now saying, “Just kidding!” Instead of using the term “PPAs,” the utility now prefers “surcharges,” skirting FERC’s ruling and hoping it won’t notice there’s been no real change. Read More »

Posted in FirstEnergy, Ohio, Utility Business Models / Comments are closed

FirstEnergy Sought a Bailout. Ohio Regulators are Simply Selling Out.

By Dick Munson / Published: December 1, 2015

Remember when we commended the Public Utility Commission of Ohio (PUCO) staff for looking out for Ohioans’ best interests and taking a reasonable stance against FirstEnergy’s $3-billion bailout request?

We take it all back.

It looks like the staff has taken a big gulp of FirstEnergy’s flip-flopping Kool-Aid.

The Akron-based utility giant has been trying to convince the PUCO to prop up its uneconomic power plants for the next 15 years, essentially saddling Ohioans with the cost of FirstEnergy’s poor investments. The PUCO is comprised of the staff – policy and regulatory experts – and the Commission itself, five Commissioners appointed by the Governor who ultimately will make the decision on whether to approve the bailout. Initially, the PUCO staff appeared to see right through FirstEnergy’s cheap trick and recommended the Commission reject the deal.

But last week – despite the previous objection to the subsidy plea – the PUCO staff embraced a backroom deal with FirstEnergy that gives the company even more than it wanted, presenting the utility with an incredible gift just in time for the holidays. This is a disappointing and shocking move that represents a reversal on Ohio’s decade-long commitment to competition in electricity markets. Read More »

Posted in Clean Energy, FirstEnergy, Ohio / Read 2 Responses

Ohio’s FirstEnergy Forecasts are More Political than Accurate

By Dick Munson / Published: October 1, 2015

Nobody can predict the future. But from markets to sports, so much of our world is focused on speculation. Ohio-based FirstEnergy has a habit of missing market predictions in spectacular fashion, often because the numbers it advances “prove” the political point that would most benefit the utility’s bottom line.

Consider the case of Environmental Protection Agency’s proposal to reduce mercury and particulate emissions from power plants. FirstEnergy wanted to kill the Mercury and Air Toxic Standards (MATS) and argued the recommended rules would cost it some $3 billion to comply. That predicted cost came in the third quarter of 2011, before the EPA standard was finalized. A year later, after the final rule was released, FirstEnergy cut its estimate nearly in half, to $1.7 billion. A year later the number was down to $465 million, and by 2015 the company admitted it needed to spend only $370 million to comply with MATS.

FirstEnergy’s forecasting “prowess” also extends to its bailout request now before the Public Utility Commission of Ohio (PUCO). According to Cathy Kunkel with the Institute for Energy Economics & Financial Analysis (IEEFA), “FirstEnergy needs to show PUCO that wholesale market prices are likely to rise steeply so that ratepayers will benefit from the new contract it seeks.”

Posted in Clean Energy, FirstEnergy, General, Ohio / Comments are closed

Ohio’s FirstEnergy Gains Hundreds of Millions, but Still Wants More

By Dick Munson / Published: September 28, 2015

At FirstEnergy, too much is never enough.

According to one Wall Street analyst, the Ohio-based utility “benefitted substantially” from recent auctions by PJM, the electric grid manager in the Midwest and Mid-Atlantic. In fact, it appears the company’s bounty for the next two years is $435 million more than it was projected to earn.

This is a direct result of FirstEnergy and other utilities’ successful efforts earlier this year to convince PJM to change how its electricity auctions were structured.

After the Polar Vortex of 2014, when many power plants shut down because they couldn’t obtain fuel over frozen pipelines or highways, the utilities argued PJM should provide higher payments for power plants that could provide reliable electricity in winter months as well as in the summer when air conditioning demands are high. The change, of course, would provide more revenue to coal-fired and nuclear-fired units that tend to run consistently, including FirstEnergy’s old and inefficient power plants.

You might think FirstEnergy would celebrate its success in redesigned power markets. But you would be wrong. Despite the auction windfall, the company maintains it still needs the Public Utility Commission of Ohio (PUCO) to approve a $3 billion bailout from Ohio customers to keep its inefficient, dirty power plants running. Fortunately, it appears the PUCO staff has seen right through this request. Read More »

Posted in Clean Energy, FirstEnergy, General, Ohio / Tagged Ohio, PUCO | Comments are closed