Quantcast
Energy

Massive Bailout Approved for FirstEnergy

The Ohio Public Utilities Commission (PUCO) approved a scheme Wednesday that will force FirstEnergy's customers to hand over approximately $200 million annually to the company and its shareholders for the next 3-5 years. Customers will receive virtually nothing in return for this massive subsidy, which could ultimately reach $1 billion.

A coal-fired power plant on the Ohio River. Robert S. Donovan

Under Wednesday's order, FirstEnergy will begin to receive hundreds of millions of dollars, with effectively no strings attached. Although characterized as a "distribution modernization rider," nothing in the commission's order requires that these customer dollars be invested in modernizing Ohio's electrical grid or in any way be spent to benefit Ohio customers. Instead, the dollars can be siphoned off from FirstEnergy's Ohio utilities and used to bail FirstEnergy Corp. out of its poor coal investments while boosting the profits of corporate shareholders.

"Today's decision takes hundreds of millions of dollars out of customers' pockets in order to create a massive slush fund for FirstEnergy Corp. and its shareholders," said Shannon Fisk, attorney at the non-profit environmental law firm Earthjustice.

"And the fact that FirstEnergy asked for billions more does not make this decision any less unreasonable. Rather than forcing customers to prop up profits for a corporation that made a bad bet on aging coal plants, the commission should be looking after customers and ensuring investments in job-creating renewable energy, energy efficiency and smart grid initiatives."

Through Wednesday's decision, the commission has aided FirstEnergy's efforts to sidestep a recent order of the Federal Energy Regulatory Commission (FERC) that raised serious questions about FirstEnergy's previous bailout proposal. Under that proposal, customers would have directly assumed all of the financial risk of financially struggling coal and nuclear plants owned by FirstEnergy Corp.'s unrelated competition generation business.

In late April, FERC ruled that FirstEnergy's previous bailout proposal—which PUCO had approved a month earlier—may violate federal safeguards concerning transactions between public utilities and their unregulated affiliates. FERC blocked FirstEnergy's bailout scheme pending a federal review. Rather than submit its proposal for FERC review, FirstEnergy concocted a new scheme intended to bypass the FERC order. Although the bailout ultimately approved by PUCO is structured a bit differently and Wednesday's order mentions grid modernization in passing, the fact remains that this bailout poses the same risk to customers that the FERC order sought to prevent.

"In this long-awaited and complicated decision, PUCO missed a critical opportunity to seriously focus FirstEnergy on the more diversified, cleaner energy future that tens of thousands of customers wrote the commission asking for," said Dan Sawmiller, senior representative for Sierra Club's Beyond Coal Campaign in Ohio.

"A few months ago, FirstEnergy took an important step in moving beyond coal when it announced closure of four units at its Sammis coal plant. With PUCO's decision now issued, we hope to be able to work with FirstEnergy to accelerate its path beyond coal and nuclear and toward new investments in clean energy, energy efficiency and other modern grid initiatives like infrastructure for electric vehicles."

Wednesday's order marks the latest development in a more than two-year effort by FirstEnergy to obtain a customer-funded bailout. Throughout that time consumer groups, industrial customers, independent power producers and environmental non-profits have united in challenging FirstEnergy's efforts as contrary to law and bad for customers. Challenges before the Ohio Supreme Court and FERC to the commission's approval of the bailout are expected.

Show Comments ()
Sponsored
Researchers warn that unchecked fossil fuel emissions would raise global temperatures to catastrophic levels. Gerry Machen / Flickr

New Study: Global Warming Limit Can Still Be Achieved

By Tim Radford

Scientists in the UK have good news for the 195 nations that pledged to limit global warming to well below 2°C: it can be done. The ideal limit of no more than 1.5°C above the average temperatures for most of human history is possible.

All it requires is an immediate reduction in the combustion of fossil fuels—a reduction that will continue for the next 40 years, until the world is driven only by renewable energy.

Keep reading... Show less
Politics
Hurricane-damaged Barbuda. Caribbean Community / Flickr

Devastated Island Leaders: Climate Change 'A Truth Which Hits Us'

As residents in Puerto Rico and the Virgin Islands prepared to take cover from Hurricane Maria, representatives of island nations devastated by hurricanes made a plea to the UN for recovery funding.

In a hastily-convened special session, leaders of Barbuda, the Dominican Republic, the Bahamas and other nations detailed the billions of dollars needed to rebuild after Hurricanes Irma and Maria, and argued that the increasing impacts of climate change on island nations required a rethinking of how the UN provides humanitarian aid.

Keep reading... Show less
Popular
Gen. Joseph L. Lengyel / Facebook

National Guard Chief Highlights Climate Change as Pruitt Touts Denial on TV

Climate change could be causing storms to become "bigger, larger, more violent," underlining the need to have a robust military response to disasters across the country, the top officer of the National Guard Bureau said Tuesday.

"I do think that the climate is changing, and I do think that it is becoming more severe," Gen. Joseph Lengyel told reporters, noting the number of severe storms that have hit the U.S. in the past month. The general might want to take U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt aside for a chat on climate change and disasters: Pruitt sat down for two friendly interviews on Fox yesterday to tout his idea for a red team/blue team "debate" on climate.

Keep reading... Show less
iStock

The Hazards of EIA Energy Forecasts

Accepting the conclusions of the latest energy outlook, released last week by the U.S. Energy Information Administration (EIA) means also accepting certain climate catastrophe.

As we have noted before, the EIA has made a routine out of releasing unrealistic, distorted and dangerous outlooks on the future of global energy demand. These projections should come with a warning label.

Keep reading... Show less
Sponsored
Popular

Sci-Fi Novel Envisions Corporatocracy in a Climate-Changed Future

By Nexus Media, with Tal M. Klein

In Tal Klein's new novel, The Punch Escrow, humans have successfully tackled disease and climate change, but powerful corporations control everything. The book has created a stir among sci-fi fans, and there are already plans to adapt it to the big screen. In this conversation with Nexus Media, Klein shares his perspective on science, technology and the future of our species. This interview has been edited for length and clarity.

Keep reading... Show less
Popular
Dubai Electricity and Water Authority Facebook

World's Largest Solar Park to Also Host World's Tallest Solar Tower

The Dubai government has awarded a $3.9 billion contract to construct the 700-megawatt fourth and final phase of the world-record-holding Mohammed bin Rashid Al Maktoum Solar Park.

The project also includes the construction of an 850-foot-tall solar tower that receives focused sunlight, the world's tallest such structure once complete.

Keep reading... Show less
Sponsored
Popular
Nike

Nike's New 'Flyleather' Sneakers Are Made From 50% Recycled Leather

By Daniele Selby

Nike's new sneakers are pretty fly—and we're not just talking about how they look. The company's new Flyleather sneakers look good, feel great and are less damaging to the environment.

In 2012, Nike introduced its Flyknit technology, which recycled plastic and other material into lightweight shoes, according to GQ. With Flyknit shoes, Nike aimed to make sustainable fashion functional and trendy, and it has applied that same mentality to its new Flyleather shoes, which it unveiled this week to coincide with Climate Week.

Keep reading... Show less
Alaska's Arctic National Wildlife Refuge is one of 15 threatened wild places profiled in "Too Wild To Drill." Florian Schulz

These 15 Unique Wild Lands Are Threatened By Extractive Industries

A new report released Tuesday by The Wilderness Society raises the alarm about wild lands threatened by extractive industries eager to exploit the resources on or underneath them, including oil, gas and coal.

Too Wild To Drill identifies 15 unique places found on public lands that are at high risk of drilling, mining and other development—and the damage and destruction that inevitably follow. These lands provide Americans with important benefits such as clean air and water, wildlife habitat, recreational opportunities and jobs and other socioeconomic benefits.

Keep reading... Show less
Sponsored

mail-copy

Get EcoWatch in your inbox