Don't be fooled. Know the facts about FirstEnergy's Bailout Plan.
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Happy New Year! We hope everyone is rested and ready for 2016. We’re going to need all the energy we can get to convince the Public Utility Commission of Ohio (PUCO) to prioritize Ohioans’ health and household electricity costs over FirstEnergy’s political clout.

In case you missed it over the holidays, leading power producer Exelon countered FirstEnergy’s eight-year subsidy request with "a guaranteed eight year offer from Exelon Generation Company […] for 100% emissions-free power.” Additionally, rather than increase customers’ costs, Exelon asserts its power “will provide well over $2 billion in savings to Ohio families and businesses as compared to the grossly lopsided deal offered by FirstEnergy Ohio." Hard to argue with the benefits of competition over bailouts. You can read our statement on Exelon’s involvement here.

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

 
 

Multibillion Dollar Bailouts, Party of Two

FirstEnergy isn’t the only utility trying to force Ohioans to pay for its bad business decisions. American Electric Power Ohio (AEP) also has a multibillion-dollar proposal up for consideration, and also struck a settlement deal with the PUCO staff.

Just like FirstEnergy’s settlement, AEP’s includes a few nods to clean energy, but the provisions mainly serve as window dressing. The carbon-reduction goals have little to no teeth, while the subsidies guarantee AEP will keep operating uneconomic power plants that would otherwise close. Plus, if this bailout is approved, AEP gets guaranteed profits on day one, and customers get guaranteed higher electricity rates.

In fact, the Ohio Consumers’ Counsel estimates AEP’s bailout will now cost Ohioans $2 billion to keep its aging, unprofitable fleet alive and kicking for the next eight years.

“AEP's proposal comes at a time when Ohioans already are paying more for electricity, on average, than consumers in 32 other states,” said Ohio Consumers’ Counsel’s Bruce Weston. Add that on top of the nearly $4-billion price tag of FirstEnergy’s bailout, and Ohioans could be facing some seriously steep increases on their bills unless the PUCO rejects these deals.

 
 

Grid Operator to Weigh In on Reliability Claims

Ohio has a competitive retail electric market, meaning customers can buy electricity from many different sellers. As part of a larger, regional market, the grid operator – PJM Interconnection – oversees the grid and ensures electric reliability is maintained in the least-cost manner.

Until recently, FirstEnergy has embraced competition and even welcomed it when natural gas prices were higher. But now it’s asking the PUCO to disrupt the market and guarantee profits for its power plants – citing reliability as the main reason.

Enter PJM, which will be conducting a “we’ll be the judge of that” analysis to determine how the FirstEnergy and AEP proposals will affect the region’s wholesale electricity market. “Our hope is that this analysis can help to inform the public debate so that regulators and policymakers understand fully any trade-offs that may arise through the policies they may be considering,” said PJM General Counsel Vince Duane.

PJM’s input seems particularly apropos given Governor John Kasich’s recently-added two cents on the bailouts, in which he said his only concern is providing long-term, reliable electricity for Ohioans.

Although the analysis may arrive after the PUCO makes its decision, PJM’s involvement should be a tipoff that FirstEnergy’s and AEP’s reasoning is not as airtight as the utilities want us to believe.

 

And in FirstEnergy’s Corner, Some Lobbying Heavyweights

A recent editorial in the Cleveland Plain Dealer spelled out exactly what opponents of the FirstEnergy and AEP bailouts are up against: 30 top-shelf, Statehouse lobbyists. Considering the 3.5 million customers that stand to be affected, plus the long list of groups opposing the subsidies, 30 may not seem like much. But these lobbyists have a whole lot of high-reaching connections. The editorial puts it best:

“In the real world, an army of 3.5 million people would do to 30 opponents what an Ohio Department of Transportation steamroller does to fresh asphalt. But this isn't the real world. This is Ohio's Statehouse.”

The editorial goes on to explain the details of the bailout proposals, including how FirstEnergy and AEP claim the deals will ultimately benefit its customers “in the long run,” noting:

“Of course, 'in the long run we are all dead,' John Maynard Keynes said. (Keynes, appropriately, was an economist.)”

Well said, Plain Dealer. And Keynes.