Quantcast

This Public Utility Is Waging an All-Out War on Renewable Energy

Business

America’s electricity landscape is changing dramatically. Clean energy resources like solar and wind are becoming cost competitive with conventional coal, global corporations like Walmart, Google and Facebook are pressuring utilities to increase their share of renewables, and the cost of investing in energy efficiency measures is now under half the cost of building dirty, coal-fired power plants.

FirstEnergy, which owns power plants and distribution utilities in five states, is burdened by its heavy reliance on coal.
Photo credit: Shutterstock

While some in the utility industry are adapting their business models to accommodate these changes, others are fighting it. Nowhere is this more apparent than in Ohio, where Akron-based power company, FirstEnergy, recently gained regulatory approval to abandon its energy efficiency programs. While this move is expected to raise electricity rates for FirstEnergy customers and increase harmful emissions from the coal-fired power plants that will be needed to “fill the gap” of previously offset energy demand, FirstEnergy has much more in store for the Buckeye State. In fact, they are waging an all-out war on clean energy in a last-ditch effort to protect their inefficient, polluting and unprofitable fleet of coal-fired power plants.

Greed versus efficiency

FirstEnergy, which owns power plants and distribution utilities in five states, is burdened by its heavy reliance on coal, a strategic decision accelerated back in 2011 when it acquired Allegheny Power—an energy company whose fleet was comprised of 78 percent coal-fired plants. With gas prices at an all-time low, an increased use of renewable energy and weak energy demand resulting from customer energy efficiency improvements, this decision continues to have major financial repercussions for the company. As a result, FirstEnergy’s stock price has plummeted and financial analysts have downgraded the company.

In an effort to remain competitive in an evolving industry, FirstEnergy is now requesting that the Public Utilities Commission of Ohio (PUCO) authorize substantial, customer-funded subsidies to bail out its uneconomic power plants. This deal would lock in what Environmental Defense Fund’s Cheryl Roberto, in testimony before the PUCO, called “non-competitive purchase agreement.” This type of agreement would ensure a substantial portion of FirstEnergy’s power comes from its failing coal plants for years to come—regardless of their profitability and an evolving energy market that’s already trending toward cleaner energy resources. Customers, moreover, would be forced to pay the subsidy whether the plants deliver power or not, bearing the operational risks for these plants.

Customers, of course, will face higher bills if the power purchase agreement is granted because the utility wants to receive more for the electricity its coal-burning plants produce than the current market price for power (which is already being driven down by clean energy market players like solar, wind, demand response and energy efficiency). In other words, people who choose to buy clean energy will also be forced to buy dirty, fossil-fueled energy as well—unnecessarily paying twice for power.

What’s worse—as recently reported by Midwest Energy News—is FirstEnergy’s attempt to hide these cost increases, “citing confidentiality claims to prevent public disclosure of large amounts of cost data and projections related to the plans.”

But FirstEnergy’s desperate attempts to prop up their failing business model do not stop here.

The company recently said that demand response, which pays people to conserve energy when the electric grid is stressed, is “starving” traditional generation out of its rightful revenue in wholesale energy markets. As a result, FirstEnergy is attempting to get demand response kicked out of the PJM (mid-Atlantic) energy market. As it stands now, conventional sources of energy like coal compete on the basis of price with non-traditional energy sources like demand response and renewables for a chance to power millions of homes and businesses across Ohio. Since demand response is a low-cost, zero-carbon energy resource, eliminating it as an option in the competitive energy market would be a detriment to Ohioans' health, environment and pocketbooks. In 2013 alone, for example, demand response saved customers in the mid-Atlantic region $11.8 billion.

These attempts to stymie clean energy growth (and pass the cost on to customers) comes on the heels of another attack by FirstEnergy earlier this year, in which the utility successfully lobbied for legislation (S.B. 310) to freeze Ohio’s efficiency and renewable standards. This is the same law that allowed FirstEnergy to request an end to its energy efficiency programs last month—the first Ohio utility to do so under this new law. FirstEnergy won this fight by arguing that efficiency programs would raise electricity rates. However, in previous filings before the PUCO, the company admitted the initiatives saved families millions of dollars. In more honest (but less public) presentations to investors, the company's executives admitted low-cost, clean energy efforts were interfering with their power sales and profits.

FirstEnergy is grasping at straws

Despite these efforts to weaken the competitiveness of clean energy resources in Ohio, FirstEnergy has not succeeded in improving its financial situation, and these new tactics—eliminating energy efficiency programs, pleading for a bailout, and attempting to kick demand response out of the energy marketplace—aren’t expected to solve their financial woes. FirstEnergy is grasping at straws. They’re working from a model that’s on its way out, and attempts to fight against this change will likely only yield more disappointing results.

It is Environmental Defense Fund’s belief that PUCO should reject FirstEnergy’s proposal and ensure full corporate separation so a utility can no longer cross-subsidize or favor its affiliate companies in order to block competition. Doing so would send a clear message to clean energy businesses, entrepreneurs, investors and customers that Ohio is ready for a new era—one in which utility profits are not placed ahead of Ohioans’ best interests and electricity is clean, reliable and affordable.

YOU MIGHT ALSO LIKE

Tar Sands Mining Coming to the Tennessee River Valley?

Help Save One of America’s Most Pristine and Endangered Rivers from Proposed Coal Mine

Frack-Happy Texas Forced to Face the Reality of Fracking-Related Earthquakes

EcoWatch Daily Newsletter

Natural Resources Defense Council

By Emily Deanne

Shower shoes? Check. Extra-long sheets? Yep. Energy efficiency checklist? No worries — we've got you covered there. If you're one of the nation's 12.1 million full-time undergraduate college students, you no doubt have a lot to keep in mind as you head off to school. If you're reading this, climate change is probably one of them, and with one-third of students choosing to live on campus, dorm life can have a big impact on the health of our planet. In fact, the annual energy use of one typical dormitory room can generate as much greenhouse gas pollution as the tailpipe emissions of a car driven more than 156,000 miles.

Read More Show Less
Kokia drynarioides, commonly known as Hawaiian tree cotton, is a critically endangered species of flowering plant that is endemic to the Big Island of Hawaii. David Eickhoff / Wikipedia

By Lorraine Chow

Kokia drynarioides is a small but significant flowering tree endemic to Hawaii's dry forests. Native Hawaiians used its large, scarlet flowers to make lei. Its sap was used as dye for ropes and nets. Its bark was used medicinally to treat thrush.

Read More Show Less
Sponsored
Frederick Bass / Getty Images

States that invest heavily in renewable energy will generate billions of dollars in health benefits in the next decade instead of spending billions to take care of people getting sick from air pollution caused by burning fossil fuels, according to a new study from MIT and reported on by The Verge.

Read More Show Less
Aerial view of lava flows from the eruption of volcano Kilauea on Hawaii, May 2018. Frizi / iStock / Getty Images

Hawaii's Kilauea volcano could be gearing up for an eruption after a pond of water was discovered inside its summit crater for the first time in recorded history, according to the AP.

Read More Show Less
A couple works in their organic garden. kupicoo / E+ / Getty Images

By Kristin Ohlson

From where I stand inside the South Dakota cornfield I was visiting with entomologist and former USDA scientist Jonathan Lundgren, all the human-inflicted traumas to Earth seem far away. It isn't just that the corn is as high as an elephant's eye — are people singing that song again? — but that the field burgeons and buzzes and chirps with all sorts of other life, too.

Read More Show Less
Sponsored
A competitor in action during the Drambuie World Ice Golf Championships in Uummannaq, Greenland on April 9, 2001. Michael Steele / Allsport / Getty Images

Greenland is open for business, but it's not for sale, Greenland's foreign minister Ane Lone Bagger told Reuters after hearing that President Donald Trump asked his advisers about the feasibility of buying the world's largest island.

Read More Show Less
AFP / Getty Images / S. Platt

Humanity faced its hottest month in at least 140 years in July, the US National Oceanic and Atmospheric Administration (NOAA) said on Thursday. The finding confirms similar analysis provided by its EU counterparts.

Read More Show Less
Newly established oil palm plantation in Central Kalimantan, Indonesia. Rhett A. Butler / Mongabay

By Hans Nicholas Jong

Indonesia's president has made permanent a temporary moratorium on forest-clearing permits for plantations and logging.

It's a policy the government says has proven effective in curtailing deforestation, but whose apparent gains have been criticized by environmental activists as mere "propaganda."

Read More Show Less