Full Title: FirstEnergy, A Major Utility Seeks a Subsidized Turnaround
Author(s): Tom Sanzillo and Cathy Kunkel
Publisher(s): Institute for Energy Economics and Financial Analysis
Publication Date: October 1, 2014
Full Text: Download Resource
Description (excerpt):
FirstEnergy is one of the largest electric utility holding companies in the country. Its distribution utilities deliver electricity to approximately 6 million customers in Ohio, West Virginia, Maryland, Pennsylvania, New Jersey, and a very small area of New York. The company’s strategy has involved heavy reliance on coal generation. FirstEnergy increased its exposure to coal in 2011 with its merger with Allegheny Energy, a company 78% dependent on coal.
FirstEnergy’s financial condition has deteriorated since it merged with Allegheny, and its key financial metrics are on a downward trajectory. FirstEnergy’s latest proposed regulatory bailout is its pending request to the Public Utilities Commission of Ohio asking ratepayers to subsidize the continued operation of its W. H. Sammis coal plant, its Davis-Besse nuclear plant, and its share of the OVEC coal plants. FirstEnergy is requesting that its Ohio distribution utilities be allowed to enter into a fifteen-year contract to purchase the output of these plants at a price that significantly exceeds wholesale electricity market prices.