FirstEnergy Bankruptcy a 'Cautionary Tale' for Coal and Nuclear Industry

Electric services giant FirstEnergy Corp. announced over the weekend that its embattled coal and nuclear units have filed for Chapter 11 bankruptcy protection.
This move comes just days after the Akron, Ohio-headquartered company called on Rick Perry's Department of Energy for an "emergency order" to save its dying coal and nuclear plants in the northeastern U.S.
FirstEnergy Solutions (FES), the competitive subsidiary of FirstEnergy, along with all FES subsidiaries and FirstEnergy Nuclear Operating Company announced its widely anticipated bankruptcies on Saturday.
The coal and nuclear energy sectors have been struggling over the past decade due to an influx of cheap natural gas and the rapid rise of renewable energy.
The Sierra Club also said the bankruptcy is a culmination of "short-sighted business decisions and executive mismanagement that resisted investing in clean, renewable energy, and its workers."
"FirstEnergy Solutions' bankruptcy is a cautionary tale for utilities, investors, and public officials who think the coal and nuclear industries will somehow rebound in the coming years. They will not," Mary Anne Hitt, Director of Sierra Club's Beyond Coal campaign, said.
"America's 21st century energy market demands cheap, flexible energy resources that can rapidly shift with electricity demands and don't pollute local air and water. Coal and nuclear plants are too expensive and too dirty to compete in the modern market," she continued.
"FirstEnergy Solutions is in bankruptcy because it continually ignored America's shift to clean energy by investing in uneconomic coal and nuclear plants which have been losing money for years."
This Public Utility Is Waging an All-Out War on Renewable Energy http://t.co/oDMivbD9Wy @RenewablesNews @cleantechnica— EcoWatch (@EcoWatch)1430517015.0
The filing also puts the pro-coal Trump administration in an awkward position. Perry has previously issued plans to subsidize the nation's struggling coal and nuclear plants, but federal regulators rejected the proposal earlier this year.
FirstEnergy Solutions' request for the energy secretary to invoke Section 202c of the Federal Power Act—a law intended for use during national emergencies—would force electricity customers to prop up all coal and nuclear plants in the PJM electricity market.
MarketWatch reported:
That forces President Donald Trump's Energy Department into a decision on whether to intervene under a lightly used, 83-year-old law and compel the nation's largest electric-grid operator to dispatch power from FirstEnergy's coal and nuclear plants effectively before any other.
Trump has been one of the coal industry's biggest boosters, campaigning on reviving a downtrodden industry, and his administration has voiced support for nuclear, too. Both of those fuels are facing tough competition as alternatives—including natural gas, and wind and solar power—have become cheap and more plentiful.
Should the Ohio company's plea succeed, it could protect thousands of jobs at nuclear and coal plants, as well as their suppliers. But it would hurt rival energy businesses and could raise electricity prices for companies and consumers across the Midwest and mid-Atlantic states. That poses significant risk to Trump by antagonizing supporters among electricity users and companies in the oil-and-gas industry that have become primary suppliers to power plants.
But senior Energy Department staff said recently they have no plans to use the emergency order for uneconomic plants.
The Sierra Club is calling on FirstEnergy Corp. to protect its workers and their benefits from the bankruptcy process and to commit to its environmental responsibilities, particularly if its coal and nuclear power plants are retired or sold.
"FirstEnergy Solutions workers and local communities are impacted the most by Saturday's filing, being left with polluted grounds and a significant loss to tax revenue and school funding," said Neil Waggoner, Ohio campaign representative of Sierra Club's Beyond Coal campaign.
"FirstEnergy's bad business decisions put the company into bankruptcy but the company cannot be allowed to walk away from its obligations. FirstEnergy has a responsibility to collaborate with local leaders to build a plan that supports workers and the communities where it's operated for generations."
The bankruptcy filing does not involve FirstEnergy Corp. or its distribution, transmission, regulated generation and Allegheny Energy Supply subsidiaries.
"The six million customers of our regulated utilities will continue to receive the same reliable service, while our regulated generation facilities will continue normal operations, with the same longstanding commitment to safety and the environment," Charles E. Jones, president and CEO of FirstEnergy, said in a statement.
New EarthX Special 'Protecting the Amazon' Suggests Ways to Save the World’s Greatest Rainforest
To save the planet, we must save the Amazon rainforest. To save the rainforest, we must save its indigenous peoples. And to do that, we must demarcate their land.
A new EarthxTV film special calls for the protection of the Amazon rainforest and the indigenous people that call it home. EarthxTV.org
- Meet the 'Women Warriors' Protecting the Amazon Forest - EcoWatch ›
- Indigenous Tribes Are Using Drones to Protect the Amazon ... ›
- Amazon Rainforest Will Collapse by 2064, New Study Predicts ... ›
- Deforestation in Amazon Skyrockets to 12-Year High Under Bolsonaro ›
- Amazon Rainforest on the Brink of Turning Into a Net Carbon Emitter ... ›
EcoWatch Daily Newsletter
By Anke Rasper
"Today's interim report from the UNFCCC is a red alert for our planet," said UN Secretary General Antonio Guterres.
The report, released Friday, looks at the national climate efforts of 75 states that have already submitted their updated "nationally determined contributions," or NDCs. The countries included in the report are responsible for about 30% of the world's global greenhouse gas emissions.
- World Leaders Fall Short of Meeting Paris Agreement Goal - EcoWatch ›
- UN Climate Change Conference COP26 Delayed to November ... ›
- 5 Years After Paris: How Countries' Climate Policies Match up to ... ›
- Biden Win Puts World 'Within Striking Distance' of 1.5 C Paris Goal ... ›
- Biden Reaffirms Commitment to Rejoining Paris Agreement ... ›
Trending
Plastic Burning Makes It Harder for New Delhi Residents to See, Study Suggests
India's New Delhi has been called the "world air pollution capital" for its high concentrations of particulate matter that make it harder for its residents to breathe and see. But one thing has puzzled scientists, according to The Guardian. Why does New Delhi see more blinding smogs than other polluted Asian cities, such as Beijing?
- This Indian Startup Turns Polluted Air Into Climate-Friendly Tiles ... ›
- How to Win the Fight Against Plastic - EcoWatch ›
In a historic move, the Delaware River Basin Commission (DRBC) voted Thursday to ban hydraulic fracking in the region. The ban was supported by all four basin states — New Jersey, Delaware, Pennsylvania and New York — putting a permanent end to hydraulic fracking for natural gas along the 13,539-square-mile basin, The Philadelphia Inquirer reported.
- Appalachian Fracking Boom Was a Jobs Bust, Finds New Report ... ›
- Long-Awaited EPA Study Says Fracking Pollutes Drinking Water ... ›
- Pennsylvania Fracking Water Contamination Much Higher Than ... ›
Colombia is one of the world's largest producers of coffee, and yet also one of the most economically disadvantaged. According to research by the national statistic center DANE, 35% of the population in Columbia lives in monetary poverty, compared to an estimated 11% in the U.S., according to census data. This has led to a housing insecurity issue throughout the country, one which construction company Woodpecker is working hard to solve.
- Kenyan Engineer Recycles Plastic Into Bricks Stronger Than ... ›
- Could IKEA's New Tiny House Help Fight the Climate Crisis ... ›