The second round of hearings for FirstEnergy’s bailout are underway, and the business case against the request has been growing. We already knew the pollution-heavy deal would harm the environment, and the $4 billion in increased costs would be a serious stress on Ohioans’ wallets. But now we can add the clear-cut business case to the long list of reasons the Public Utility Commission of Ohio (PUCO) should reject the deal. More on that below.

FYI one of FirstEnergy’s competitors, American Electric Power (AEP), has a similarly lousy power-purchase proposal before the PUCO. Although distinct, many critics and reporters have begun to address the two utility deals in the same capacity. Since the PUCO should reject both, we will do so as well when applicable.

You can always visit EDF’s FirstEnergy website for our newsletter archive and links to the latest news about FirstEnergy’s bailout.

Ohio Bailouts: All Around, Alternatives Abound

In our last newsletter, we noted how leading power producer Exelon formally offered to supply “100% emissions-free power” during the same timeframe of FirstEnergy’s deal – all while saving customers money. Now Houston-based power generator Dynegy has joined the fray, offering up “superior alternatives” to “the exorbitant and counter-productive subsidies currently under consideration for FirstEnergy and American Electric Power.”

The utility suggested two options for replacing the bailouts at stake: one that promises to save $5 billion by meeting the electricity demand with local Dynegy power, and another that recommends using the cost of the proposals to build new, cleaner-burning natural gas plants and create jobs in the process.

So, between Exelon’s guarantee and Dynegy’s two plans, the PUCO has three valid alternatives – all of which include cleaner energy, lower costs, and homegrown electricity generation. If you remove political clout from the equation, the choice is a no-brainer.

Ohio Manufacturers to FirstEnergy, AEP: You’re Not Helping. You’re Hurting.

FirstEnergy and AEP repeatedly have argued that they need these subsidies to maintain reliable electricity. Now, we know from the above story that this claim is bogus – other companies are prepared to step in and keep the lights on. But, regardless, reliability remains a major touchstone in the utilities’ justification of the bailouts. A wise move considering Governor John Kasich’s primary concern with the proposals is electric dependability.

That’s why testimony from the Ohio Manufacturers Association (OMA) is particularly noteworthy. The group, which aims to protect and grow Ohio manufacturing and represents major electricity consumers, suggests the proposed deals “hold out the very real potential of deterring investment in the electric generating capacity and harming the long-term reliability of the electric system.”

In other words, rather than guarantee electric reliability, FirstEnergy and AEP’s bailouts may do the exact opposite. We hope Gov. Kasich is listening.

Ohio Tire Manufacturer Can’t Stay Silent on Bad Deals

Speaking of manufacturers, Cooper Tire & Rubber Co. recently asked Gov. Kasich to reject the subsidy proposals. The large Ohio tire manufacturer asserted the bailouts are bad for state businesses and the competitive economy, echoing the sentiments of many critics. The CEO believes the income-guarantee plans “will make it more difficult for Cooper Tire and other Ohio manufacturers to remain competitive in the global markets.”

Although a big deal within the electricity world, utility rate cases usually don’t attract the attention of outsiders. And when companies that typically steer clear of politics are voicing their disapproval, you know something’s up. As the Columbus Business Journal noted, Cooper Tire “doesn’t usually weigh in on issues like this but decided to speak out against ‘a political gift to the two large utilities.’”

If Cooper Tire (and the environment and Ohioans and other Ohio businesses…) is the David in this battle against Goliath, who will the PUCO side with?

AEP Lawyers Getting Desperate?

Although we focus on FirstEnergy, we couldn’t resist sharing a recent tweet from Columbus Business Journal reporter Tom Knox, who’s been sitting in on the AEP hearings. Knox noted how AEP lawyers said cross-examination from the Ohio Consumers' Counsel was an "exercise in harassment and intimidation." Last we checked, cross-examination was a standard part of the legal process.