Thursday July 28, 2016

Wow. Surprising news keeps coming out of Ohio, and we’re not talking about last week’s RNC. Let’s dive in.

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

FirstEnergy’s Campaign: Greed Trumps Reason

The last time we updated the FirstEnergy situation, the utility giant had cleverly and carefully reworded its bailout proposal to avoid the feds weighing in. New language, same gist: Make Ohio customers pay $4 billion to keep unprofitable power plants afloat.

Then, the staff of the Public Utilities Commission of Ohio (PUCO) said it wasn’t so sure about the updated bailout request, instead recommending a new subsidy solution: $131 million per year over three years, totaling nearly $400 million. Except this time it has nothing to do with the actual delivery of power – the money would simply serve to enhance FirstEnergy’s credit rating.

You may think, “Wow, it’s one-tenth of what the utility was asking for! That’s a good compromise.” But one-tenth of a pile of rotten bananas is still a putrid mess. And this is still an unnecessary subsidy Ohio taxpayers should not be forced to shoulder.

But that’s hardly relevant anymore because, this week, FirstEnergy came in hot with rebuttal testimony to the PUCO, saying, “I see your $400 million subsidy, and I raise you $4.46 billion.”

Yes, that’s right. The utility decided to not only reject the staff’s subsidy recommendation, but to ask for more than its own original request – which, by the way, is technically still on the table. So FirstEnergy has two proposals before the PUCO, totaling almost $8.5 billion. Basically, if either one gets approved, the utility will still get its way.

There’s no such thing as 7 deadly utility sins, or surely FirstEnergy would have died of greed a long time ago.

RIP Old, Uneconomic Coal Plants

Last Friday, FirstEnergy finally faced the facts and announced the closure of four old, coal-fired units of its largest power plant, the W.H. Sammis Plant. Brought online between 1959-1962, the units lived a long, urm, somewhat healthy life. And if that name looks familiar, it’s because Sammis is the same plant FirstEnergy used as reasoning for the bailout, insisting Sammis needed to stay online or the lights would go out. No mention of the closure’s impact on grid reliability now (reminder: the regional grid operator says reliability is solid).

Moreover, opponents of the bailouts (including EDF) have been saying all along that these power plants are uneconomic. Care to comment on that, FirstEnergy? “It's no longer economically viable to operate these facilities."

Gloating aside, this is truly excellent news for clean air and the Ohioans who will not have to pay to prop up the units. Moreover, the announcement brings the total retired coal in Ohio past 10,000 MW – the highest of any state in the country. Cheers!

The True Price of a HQ is…$4 Billion?

There are a lot of benefits that come with having a business’ headquarters located in a city, like jobs and tax revenue. That said, every solid relationship is a two-way street, and cities provide benefits in return. Should local taxpayers really have to pay to keep companies there?

That seems to be what FirstEnergy is arguing. Testimony from last week includes an estimate of the economic impact of FirstEnergy’s corporate headquarters in Ohio – a prize to dangle in front of the PUCO in order to ask for more money.

Some 24 Fortune 500 companies have their corporate headquarters in Ohio. Not surprisingly, greedy FirstEnergy is the only one asking for a bailout to stay. If the utility giant opens the floodgates, a warning to Ohio legislators and regulators: Get ready to subsidize the other 23 as well as every drycleaner, gas-station, and dentist office.

Quote of the Week

Our quote of the week comes from FirstEnergy’s rebuttal testimony, which includes many hints of clean energy movement, but no real commitment. You see, FirstEnergy wants to invest in grid modernization, but it really, really needs this subsidy first. Then the utility promises to do so, right? Not quite.

• The deal would “enable the Companies to jump-start grid modernization initiatives and benefit customers.”

Just like singing in the shower enables us to jump-start our pop music career, or looking at a picture of salad enables us to jump-start our diet.