{"id":12030,"date":"2016-01-13T11:36:18","date_gmt":"2016-01-13T17:36:18","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=12030"},"modified":"2016-01-21T15:28:56","modified_gmt":"2016-01-21T21:28:56","slug":"the-business-case-against-firstenergys-bailout","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2016\/01\/13\/the-business-case-against-firstenergys-bailout\/","title":{"rendered":"The Business Case against FirstEnergy\u2019s Bailout"},"content":{"rendered":"

\"Team<\/a><\/p>\n

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.<\/p>\n

But when it comes to recent remarks from Ohio corporations about FirstEnergy\u2019s proposed bailout<\/a>, which would prop up its outdated power plants for the next eight years, the filings are clear \u2013 and damning. The business community sees right through the unfair deal.<\/p>\n

Consider Exelon, which bills itself as America\u2019s leading competitive energy provider. Since Exelon and FirstEnergy are competitors, it\u2019s telling that Exelon finds<\/a>\u00a0the FirstEnergy subsidy to be a \u201cgrossly lopsided deal\u201d that would \u201ccost Ohio customers billions in above-market costs.\u201d Exelon goes further, putting its money where its mouth is; specifically, the generator guarantees to supply \u201c100% emissions-free power that [\u2026] will provide well over $2 billion in savings to Ohio families and businesses.\u201d It promises to deliver this energy during the same timeframe of the FirstEnergy deal. (And major power producer Dynegy recently proposed<\/a> that it, too, can meet Ohio electric demand more competitively than FirstEnergy\u2019s subsidized power plants.)<\/p>\n

Rather than appeal to environmental or customer sentiments, Exelon\u2019s critique is all about economics. The company says competition has \u201cworked to lower energy costs and provide choice to millions of Ohio families and businesses.\u201d It also suggests \u201ca competitive process [is needed to] wash away the stain [\u2026] of the proposed out-of-market contract.\u201d Exelon digs at its competitor, noting the irony at hand:<\/p>\n

\u201cFirstEnergy led the drive to competition and up until this proceeding took positions before this Commission and other agencies and public officials which embraced competition and retail choice. FirstEnergy was right then; it is wrong today. Competition will yield the best price.\u201d<\/p>\n

(Couldn\u2019t have said it better ourselves, although we\u2019ve tried<\/a>.)<\/p>\n

[Tweet “The business case against FirstEnergy\u2019s bailout”]<\/p>\n

Exelon even echoes the cries<\/a> of numerous critics by calling the FirstEnergy proposal a \u201cbackroom deal.\u201d<\/p>\n

Other electricity competitors, represented by the Electric Power Supply Association (EPSA), are equally blunt. The group says<\/a>\u00a0FirstEnergy\u2019s plan \u201cis unambiguously contrary to the interests of the general rate-paying public of Ohio.\u201d EPSA\u2019s key criticism is \u201cthe proposed plan would shift very large risks from [FirstEnergy\u2019s] debt and equity investors onto the Companies\u2019 captive ratepayers.\u201d Noting the benefits of competition, EPSA declared, \u201cThe plan, in short, is what is commonly called a \u2018bailout.\u2019\u201d<\/p>\n

Even the Ohio Manufacturers Association (OMA), which represents major electricity consumers, finds<\/a>\u00a0the utility giant\u2019s proposal \u201cdoes not benefit customers and the public interest. The major beneficiaries [\u2026] are FirstEnergy, its stockholders, and management.\u201d The OMA repeats the theme that FirstEnergy\u2019s request \u201cshifts business risk away from stockholders and management to customers.\u201d<\/p>\n

Keeping in mind Governor John Kasich said his primary concern<\/a> is electric dependability, the state\u2019s manufacturers also question this aspect. The OMA suggests the proposed deal \u201cholds out the very real potential of deterring investment in the electric generating capacity and harming the long-term reliability of the electric system.\u201d In other words, FirstEnergy claims it needs the subsidies to guarantee electric reliability, but it may have the exact opposite effect.<\/p>\n

We knew the FirstEnergy bailout would harm the environment by subsidizing uneconomic power plants to keep spewing pollution. We also knew the deal would hurt Ohioans\u2019 wallets \u2013 to the tune of $4 billion<\/a> in increased costs. Now Exelon, the Electric Power Supply Association, and the Ohio Manufacturers Association have made the business case against bailouts equally clear. We can only hope the Public Utility Commission of Ohio will wash away the stain of this egregious deal.<\/p>\n","protected":false},"excerpt":{"rendered":"

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\u2019s proposed bailout, which would prop up its outdated power plants for the next eight years, the …<\/p>\n","protected":false},"author":39893,"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-12030","post","type-post","status-publish","format-standard","hentry","category-firstenergy","category-ohio"],"acf":[],"yoast_head":"\nThe Business Case against FirstEnergy\u2019s Bailout - 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\/2016\/01\/13\/the-business-case-against-firstenergys-bailout\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Business Case against FirstEnergy\u2019s Bailout - Energy Exchange\" \/>\n<meta property=\"og:description\" content=\"Reading testimony filed before any public utility commission can be a mind-numbing exercise. 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