As a Cruise Director for an expedition travel company in the Arctic and Antarctic, Meghan Kelly often found herself in conversations with locals about the receding coastline. She heard how decreasing sea ice is diminishing traditional hunting grounds, along with the passages between one community and the next in the Arctic. For the families who have […]

As a Cruise Director for an expedition travel company in the Arctic and Antarctic, Meghan Kelly often found herself in conversations with locals about the receding coastline. She heard how decreasing sea ice is diminishing traditional hunting grounds, along with the passages between one community and the next in the Arctic. For the families who have […]

House Bill 2020 will create a cap-and-invest program that will aggressively slash carbon emissions by 2050/

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Contradictions Abound in FirstEnergy’s Latest Bailout Attempt

Contradiction #1

FirstEnergy claims that closing its uneconomic nuclear plants would cost Ohioans an average of $35 per year between 2022 and 2029. Sounds strange, right? – that the shuttering of uneconomic (aka, expensive) power plants would cost customers more?

Well, PJM, the regional grid operator, also found it strange. In addition to the approximately $190 million annually in subsidies, PJM says a bailout will cost Ohio ratepayers some $16 million a year in lost savings because it would discourage cheaper and more efficient natural-gas generators from being built and operated. 

“PJM’s findings for consumer savings from power plant competition confirm that a competitive generation market is better for millions of Ohio consumers than charging them for bailouts and subsidies under House Bill 6,” said J.P. Blackwood, a spokesperson for the Office of the Ohio Consumers’ Counsel.

In addition, Energy News Network says the PJM analysis may underestimate costs to consumers because it fails to consider the closures’ positive impacts on long-term capacity markets, in which the grid operator buys commitments from generators to supply power three years in the future. A bailout, in contrast, would drive efficient new resources out of PJM’s auctions.

Contradiction #2

“Give me what I want or I’ll take my ball home.” This childhood taunt is similar to FirstEnergy’s “give me a bailout or I’ll close my power plants.” Yet independent research now shows that FirstEnergy hasn’t been exactly truthful when it comes to plant economics. 

A recent E-Cubed Policy Associates study confirmed that FirstEnergy Solutions’ Davis-Besse and Perry nuclear plants are profitable and that bailing them out under HB 6 would raise electricity rates for Ohioans while delivering no emissions benefits. It further states: “nuclear facilities in Ohio can easily cover their going forward/avoidable costs through 2028 and should not rationally retire.” The report was written by Dr. Paul Sotkiewicz, president of E-Cubed Associates and former chief economist for PJM Interconnection.

So if independent research confirms that the entire pretext for bailing out FirstEnergy’s power plants is bogus, why should Ohioans be forced to bail out a profitable company?

Contradiction #3 

FirstEnergy long has told Ohio lawmakers its nuclear plants need a bailout because they can’t compete against renewable energy that receives federal incentives. When talking with investors and judges, however, it tells a completely different story.  In its bankruptcy filing, FirstEnergy Solutions admits that its greatest business risk comes not from renewable energy but from natural gas prices. 

“The Debtors are exposed to risk from the volatility of the market price of natural gas. Their ability to sell at a profit is highly dependent on the price of natural gas. Low natural gas prices have been a significant contributor to the decision to deactivate the Debtors’ plants as other market participants that utilize natural gas-fired generation continue to be able to offer electricity at increasingly competitive prices, so the margins the Debtors realize from sales have been and are likely to continue to be lower. The availability of natural gas and issues related to its accessibility may have a long-term material impact on the price of natural gas.”

Contradiction #4

FirstEnergy sent its subsidiary into bankruptcy, forced creditors to lose enormous sums of money and consistently pleads for bailouts from taxpayers or ratepayers. You might think the utility’s executives would take a bit of responsibility for their poor management, but in 2018 the top seven FirstEnergy’s executives raked in more than $25 million. CEO Chuck Jones alone took home a whopping $9.9 million. That’s a nice gig if you can get it.
 

Couldn’t Have Said It Better …

The Cleveland Plain Dealer editorialized:

It’s hard to parse what Ohio legislative leaders were thinking when they exposed their “Ohio Clean Air” nuclear bailout bill for what it really is – a blatant giveaway to nuclear and coal interests. Last week, a House committee discarded green-energy provisions from House Bill 6. That doubled down on the Ohio ratepayer energy subsidies that would go primarily to benefit the Perry and Davis-Besse nuclear plants. Lawmakers then added a new section that could obligate many Ohio ratepayers to subsidize two coal-fired plants, as well.
 

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