Thursday March 16, 2017

Say it with me, now: Ohhhhmmmmm. Feeling Zen yet?

Apparently FirstEnergy is. The Ohio-based utility decided to go the meditative route in naming its new bailout request the Zero-Emissions Nuclear Resource Program, or ZEN for short.

It’s cute, but we think John Funk’s take in the Plain Dealer is more accurate: “FirstEnergy's plan to convince Ohio lawmakers they should save the company's nuclear reactors by funneling more money from customers to the company.”

And although the teachings of Zen vary, doing things for the benefits of others is a main tenet. Clearly, FirstEnergy’s is a new school of thought.

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

Why Subsidize the Profitable?

SNL Energy recently pointed out that the relevant 2016 average price of electricity meant FirstEnergy’s nuclear reactors received more revenue than their operating and maintenance expenses.

Business classes usually teach that having more income than costs leads to profits, which should make FirstEnergy happy. Really makes you wonder about that whole “not being able to compete in the market” argument. And asking for more money when you’re already making profits doesn’t seem very Zen to us.

The West Virginia Apple Doesn’t Fall Far from the Bailout Tree

Ohio isn’t the only state where FirstEnergy is trying to make up for its bad business decisions.

Specifically, the utility is attempting to offload a coal-fired power plant to its West Virginia subsidiary. The move would essentially transfer financial risk from shareholders to customers, while guaranteeing profits for the company (since electricity is regulated in WV).

It would also mean higher electric bills, since coal-fired power costs more than the region’s natural gas.

In order words, West Virginians would be bailing out a struggling, inefficient power plant. Sound familiar?

Quote of the Week

When it comes to FirstEnergy’s ZEN plan, the Crain’s Cleveland editorial team is admittedly skeptical. Their recent article highlights a number of issues with the proposal, like how the nuclear credits could mess with competition and don’t advance “technologies that represent the future.” And let’s not forget, “FirstEnergy already got a bailout last fall.”

The editorial is a thorough take on a tricky subject. But our favorite line is plain and simple:

• “The addiction to subsidies is not serving Ohio residents well.”