New FirstEnergy Bailout, Same Wolf Cry
FirstEnergy may not be consistent, but it is persistent. The utility giant regularly adjusts its rationale for subsidies, but its bail-out pleas keep popping up.
FirstEnergy began about two years ago asking for $4 billion so it could keep operating several of its uneconomic power plants. After the Federal Energy Regulatory Commission blocked that request, arguing the bailout would illegally distort regional power markets, the Ohio-based utility requested a remarkable $12 billion rate increase in order to reduce its debt and keep its headquarters in Akron. Ohio’s regulators instead offered
“only” $600 million, yet even that largess probably will be overturned by the Ohio Supreme Court. Unsurprisingly, FirstEnergy is back with a new plea – that it (still) needs huge subsidies so it can sell its two uneconomic nuclear reactors and make a higher profit.
FirstEnergy CEO Chuck Jones is “optimistic” Ohio lawmakers will introduce and approve legislation that provides financial support for the Perry and Davis-Besse reactors. Having tried before to argue such subsidies were needed to ensure the lights would stay on (grid operator says: reliability not an issue), Jones now has become something of an environmentalist, suggesting the reactors are needed because they do not emit carbon pollution.
Jones points to recent efforts in New York and Illinois to provide such zero-emission credits, although they were part of packages that transition those states to healthier, cleaner energy systems. FirstEnergy, on the other hand, has no interest in advancing low-carbon efficiency or renewable energy; it simply wants subsidies so it can maintain the status quo.
Moreover, FirstEnergy plans to sell the nuclear plants anyway. Funnily enough, it would continue to collect the proposed rate increase even if the plants are sold, and the buyer would be under no obligation to keep them open.
The utility vaguely threatens its generation subsidiary will declare bankruptcy without the bailout, not acknowledging that other American companies take that route when their bad business decisions catch up with them. Perhaps to appreciate the dangers of consistently crying “Wolf,” Jones might want to read Aesop’s Fable #210.
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