{"id":13534,"date":"2016-07-11T11:14:00","date_gmt":"2016-07-11T16:14:00","guid":{"rendered":"http:\/\/blogs.edf.org\/energyexchange\/?p=13534"},"modified":"2016-07-27T13:31:10","modified_gmt":"2016-07-27T18:31:10","slug":"ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal","status":"publish","type":"post","link":"https:\/\/blogs.edf.org\/energyexchange\/2016\/07\/11\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\/","title":{"rendered":"Ohio Regulators Attempt to Keep FirstEnergy Afloat with New Subsidy Proposal"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-13535\" src=\"https:\/\/blogs.edf.org\/energyexchange\/wp-content\/blogs.dir\/38\/files\/2016\/07\/Smokestacks-300x200.jpg\" alt=\"Smokestacks\" width=\"300\" height=\"200\" srcset=\"https:\/\/blogs.edf.org\/energyexchange\/wp-content\/blogs.dir\/38\/files\/2016\/07\/Smokestacks-300x200.jpg 300w, https:\/\/blogs.edf.org\/energyexchange\/wp-content\/blogs.dir\/38\/files\/2016\/07\/Smokestacks-768x512.jpg 768w, https:\/\/blogs.edf.org\/energyexchange\/wp-content\/blogs.dir\/38\/files\/2016\/07\/Smokestacks-1024x683.jpg 1024w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>My head feels whipsawed by the wildly changing <a href=\"https:\/\/www.edf.org\/energy\/firstenergy-facts\">proposals<\/a> to bail out FirstEnergy\u2019s uneconomic and dirty power plants. The latest development in this ongoing saga occurred June 29, when the Public Utilities Commission of Ohio (PUCO) staff <a href=\"http:\/\/dis.puc.state.oh.us\/TiffToPDf\/A1001001A16F29B72244G01560.pdf\">recommended<\/a> a new subsidy solution for the utility behemoth: $131 million per year over three years.<\/p>\n<p>While this proposal is, blessedly, 90 percent less than FirstEnergy\u2019s original $4 billion bailout proposal, it\u2019s 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.<\/p>\n<p><!--more--><\/p>\n<p>There may be a saving grace, however: The new proposal seems to be illegal. PUCO staffers suggest this \u201crefurbished\u201d bailout is needed to enhance FirstEnergy\u2019s credit rating. (The theory here is the utility is in such financial straits because of bad business decisions that rating agencies, such as Moody\u2019s and Standard and Poor\u2019s, may downgrade the utility\u2019s rating below investment grade, which would make any new financing efforts more expensive.) The <a href=\"http:\/\/codes.ohio.gov\/orc\/4909.16v1\">relevant law<\/a> does allow the commission to make such grants, but only \u201cin case of any emergency.\u201d FirstEnergy may not be flush, but it\u2019s not about to close the doors, and it has seen its stock price rise some 10 percent in the past few weeks.<\/p>\n<p>FirstEnergy, of course, doesn\u2019t want to suggest publicly it faces an \u201cemergency,\u201d since such a statement would frighten investors and tank its stock price. Yet privately, the utility does seem to use those threats at the PUCO, as evidenced by the staff suggesting FirstEnergy obtain the $131 million annual subsidy only if it keeps its headquarters in Ohio.<\/p>\n<p>PUCO staffers suggest the bailout would provide benefits to Ohio. They argue, for instance, the subsidies would be used to modernize the grid, yet the company has not submitted, nor has the PUCO approved, a grid-modernization plan. PUCO rules require utilities to show the benefits of such investments outweigh the costs. The company must also show it can recover those costs after it\u2019s proved the money was spent prudently. Neither of these steps are being taken. The PUCO staffers are recommending FirstEnergy receive the money <em>before <\/em>making any grid modernization investments, and without any showing the money has been spent prudently. Moreover, the staff is not recommending any restrictions be placed on the funds, allowing the company to use the subsidy in any way it pleases, like increasing the dividend to its shareholders rather than upgrade the grid.<\/p>\n<p>[Tweet &#8220;Ohio Regulators Attempt to Keep FirstEnergy Afloat with New Subsidy Proposal&#8221;]<\/p>\n<p>This latest proposal comes after more than a year of back-and-forth negotiations between FirstEnergy, state regulators, federal regulators, and opposition from consumer and environmental advocates.<\/p>\n<p>Starting in August 2014, the giant utility initially <a href=\"https:\/\/blogs.edf.org\/energyexchange\/2015\/05\/07\/creative-utility-accounting-estimating-the-true-cost-of-a-subsidy\/\">sought<\/a> $4 billion to underwrite power purchase agreements that would have allowed one FirstEnergy affiliate to buy expensive power from another FirstEnergy affiliate. Despite opposition from the state\u2019s manufacturers, consumers, environmentalists, and competitive electricity suppliers, the Public Utility Commission of Ohio (PUCO) in March 2016 actually <a href=\"https:\/\/www.edf.org\/media\/ohio-regulators-put-polluters-over-people?_ga=1.119243465.1341715137.1423605219\">approved the bailout<\/a>. Fortunately, the Federal Energy Regulatory Commission (FERC) shortly thereafter <a href=\"https:\/\/blogs.edf.org\/energyexchange\/2016\/05\/02\/ohio-failed-to-protect-customers-and-markets-so-federal-regulators-came-to-the-rescue\/\">required<\/a> FirstEnergy to prove it followed a competitive procurement process for this contract. Of course, FirstEnergy could not make this showing so it withdrew its proposal.<\/p>\n<p>FirstEnergy in late May <a href=\"https:\/\/blogs.edf.org\/energyexchange\/2016\/06\/17\/federal-regulators-should-again-block-firstenergys-sneaky-attempts-to-evade-oversight\/\">proposed<\/a> another $4 billion bailout, but this time tried to shield it from FERC review. This time the corporation suggested the subsidy go directly to its electricity-distribution affiliate, without guaranteeing the uneconomic power plants would continue to operate. Environmental Defense Fund (EDF) and others <a href=\"https:\/\/blogs.edf.org\/energyexchange\/wp-content\/blogs.dir\/38\/files\/2016\/06\/EPSA-FINAL-protest-to-FE-May-27-filings-.pdf\">suggested<\/a> the sleight of hand did not even pass the laugh test.<\/p>\n<div class=\"simplePullQuote right\"><p>Rejecting any and all such subsidies would be best for Ohio\u2019s manufacturers, consumers, and environment.<\/p>\n<\/div>\n<p>PUCO staff in late June agreed this new proposal should be rejected, but their latest solution \u2013 $131 million per year over three years \u2013 is no solution at all. It\u2019s yet another bad deal for Ohioans.<\/p>\n<p>FirstEnergy\u2019s justifications may be\u00a0hurting my head, but one fact remains constant: The utility giant doesn\u2019t need, nor deserve, a bailout. Rejecting any and all such subsidies would be best for Ohio\u2019s manufacturers, consumers, and environment.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>My head feels whipsawed by the wildly changing proposals to bail out FirstEnergy\u2019s 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 &#8230;<\/p>\n","protected":false},"author":39893,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46898],"tags":[],"coauthors":[],"class_list":["post-13534","post","type-post","status-publish","format-standard","hentry","category-firstenergy"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Ohio Regulators Attempt to Keep FirstEnergy Afloat with New Subsidy Proposal - 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\/07\/11\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ohio Regulators Attempt to Keep FirstEnergy Afloat with New Subsidy Proposal - Energy Exchange\" \/>\n<meta property=\"og:description\" content=\"My head feels whipsawed by the wildly changing proposals to bail out FirstEnergy\u2019s 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 ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/blogs.edf.org\/energyexchange\/2016\/07\/11\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\/\" \/>\n<meta property=\"og:site_name\" content=\"Energy Exchange\" \/>\n<meta property=\"article:published_time\" content=\"2016-07-11T16:14:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2016-07-27T18:31:10+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/blogs.edf.org\/energyexchange\/wp-content\/blogs.dir\/38\/files\/2016\/07\/Smokestacks-300x200.jpg\" \/>\n<meta name=\"author\" content=\"Dick Munson\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@dickmunson\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Dick Munson\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/07\\\/11\\\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/07\\\/11\\\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\\\/\"},\"author\":{\"name\":\"Dick Munson\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/#\\\/schema\\\/person\\\/f12d49c16b0a7cb5764ad0a839d09769\"},\"headline\":\"Ohio Regulators Attempt to Keep FirstEnergy Afloat with New Subsidy Proposal\",\"datePublished\":\"2016-07-11T16:14:00+00:00\",\"dateModified\":\"2016-07-27T18:31:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/07\\\/11\\\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\\\/\"},\"wordCount\":700,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/07\\\/11\\\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\\\/#primaryimage\"},\"thumbnailUrl\":\"http:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/wp-content\\\/blogs.dir\\\/38\\\/files\\\/2016\\\/07\\\/Smokestacks-300x200.jpg\",\"articleSection\":[\"FirstEnergy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/07\\\/11\\\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/07\\\/11\\\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\\\/\",\"url\":\"https:\\\/\\\/blogs.edf.org\\\/energyexchange\\\/2016\\\/07\\\/11\\\/ohio-regulators-attempt-to-keep-firstenergy-afloat-with-new-subsidy-proposal\\\/\",\"name\":\"Ohio Regulators Attempt to Keep FirstEnergy Afloat with New Subsidy Proposal - 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