{"id":11794,"date":"2015-12-10T14:08:27","date_gmt":"2015-12-10T20:08:27","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=11794"},"modified":"2015-12-11T13:38:33","modified_gmt":"2015-12-11T19:38:33","slug":"firstenergys-bailout-isnt-just-bad-policy-its-illegal","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2015\/12\/10\/firstenergys-bailout-isnt-just-bad-policy-its-illegal\/","title":{"rendered":"FirstEnergy\u2019s Bailout Isn\u2019t Just Bad Policy \u2013 It\u2019s Illegal"},"content":{"rendered":"

\"Gavel_iStock000003633182Medium\"<\/a>Last week, the Public Utilities Commission of Ohio (PUCO) staff endorsed<\/a> a four billion dollar bailout for FirstEnergy\u2019s coal and nuclear plants. The new deal modifies FirstEnergy\u2019s original proposal<\/a> and, if approved, would prop up the Akron-based utility giant\u2019s uneconomic power plants for the next eight years \u2013 making its customers foot the huge bill. Many parties oppose the deal<\/a>, because it is unfair to customers and interferes with the state\u2019s competitive energy market.<\/p>\n

Importantly, FirstEnergy\u2019s bailout is not only bad policy, it also violates federal law.<\/p>\n

Ohio restructured its electricity market several years ago, so FirstEnergy\u2019s 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\u2019s power plants are losing money because they are old and inefficient, and can\u2019t 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.<\/p>\n

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.<\/p>\n

In this case, the bailout deal subsidizes FirstEnergy\u2019s money-losing plants by forcing customers to pay for them, even when cheaper electricity is available from newer, more efficient power plants. \u00a0And since utilities still have a monopoly on service territories, FirstEnergy will deliver your electricity if you live in its territory \u2013 even if you buy your electricity from another supplier. That means the bailout will force everyone in the area to pay for these plants, regardless of their electricity provider. Moreover, the bailout guarantees payments for the plants\u2019 electricity, so the utility will no longer be subject to competition.<\/p>\n

Clearly, the FirstEnergy bailout runs counter to a competitive market \u2013 it harms competition.<\/p>\n

[Tweet “FirstEnergy\u2019s bailout isn\u2019t just bad policy \u2013 It\u2019s illegal.”]<\/p>\n

Two other states \u2013 New Jersey and Maryland \u2013 created similar schemes to subsidize plants located in their states. But in both cases, courts ruled<\/a> that these subsidies were anti-competitive and therefore illegal. The wholesale market supervisor even filed sworn testimony before the PUCO on this point to show why FirstEnergy\u2019s request was unlawful.<\/p>\n

It\u2019s a sad day when the PUCO staff \u2013 who are supposed to foster a competitive market \u2013 sides with large, highly-profitable utilities, rather than everyday Ohioans. The PUCO staff\u2019s deal harms the environment too, because competition would have forced these outdated, polluting plants to close. But it\u2019s even worse when the PUCO staff agrees to a deal that clearly violates federal law.<\/p>\n

The PUCO commissioners still have a chance to reject the deal. A PUCO administrative law judge recently ordered<\/a> new hearings to review issues raised by the settlement, beginning January 16. But if the commissioners do approve it, the federal court will likely overturn the ruling in order to uphold competition \u2013 even if the PUCO will not.<\/p>\n","protected":false},"excerpt":{"rendered":"

Last week, the Public Utilities Commission of Ohio (PUCO) staff endorsed a four billion dollar bailout for FirstEnergy\u2019s coal and nuclear plants. The new deal modifies FirstEnergy\u2019s original proposal and, if approved, would prop up the Akron-based utility giant\u2019s uneconomic power plants for the next eight years \u2013 making its customers foot the huge bill. …<\/p>\n","protected":false},"author":12461,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46898,28800],"tags":[],"coauthors":[],"class_list":["post-11794","post","type-post","status-publish","format-standard","hentry","category-firstenergy","category-ohio"],"acf":[],"yoast_head":"\nFirstEnergy\u2019s Bailout Isn\u2019t Just Bad Policy \u2013 It\u2019s Illegal - Energy Exchange<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.edf.org\/energyexchange\/2015\/12\/10\/firstenergys-bailout-isnt-just-bad-policy-its-illegal\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FirstEnergy\u2019s Bailout Isn\u2019t Just Bad Policy \u2013 It\u2019s Illegal - Energy Exchange\" \/>\n<meta property=\"og:description\" content=\"Last week, the Public Utilities Commission of Ohio (PUCO) staff endorsed a four billion dollar bailout for FirstEnergy\u2019s coal and nuclear plants. 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