Tuesday May 16, 2017

Last week’s hearing on FirstEnergy’s nuclear bailout saw numerous people testifying against the unnecessary subsidies. As a reminder, the Ohio-based utility wants everyday Ohioans to pay for its bad business decisions, and is trying to get a hefty bailout – to the tune of $5.25 billion – for its uneconomic nuclear reactors.

Clearly, the proposal has generated quite a bit of controversy. But Representative Bill Seitz, chairman of the Public Utilities Committee, has a unique solution! Why not let FirstEnergy’s pro-bailout customers pay for the utility giant’s mistakes? That way, those that support the bailout (we can’t imagine who that would be) could shoulder all of the burden – and FirstEnergy could continue letting others foot the bill. Problem solved.

If you're having trouble keeping track of FirstEnergy’s foibles and persistent pleas, we’ve created a handy factsheet. Check it out.

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

Bowled over by growing opposition

It takes a lot of energy to keep the lights on (and the balls regurgitated) at bowling alleys. That’s why the Bowling Centers Association of Ohio wants to send FirstEnergy’s nuclear proposal “to the gutter,” as Tom Knox of Columbus Business First fittingly put it.

The bowlers are just one of many groups in the newly-formed, nonpartisan Coalition Against Nuclear Bailouts. Reflecting the growing opposition to FirstEnergy’s pleas, the coalition includes diverse participants like AARP, the Ohio Coin Machine Association, mayors, pastors, county commissioners, and more (you can see the full list of its members here).

Various voices speaking up against FirstEnergy’s bailout? That’s right up our alley.

Big petroleum says no to big subsidies

The American Petroleum Institute Ohio (API) wants to protect Ohio jobs – not FirstEnergy’s profits.

The largest U.S. trade association for the oil and natural gas industry has joined the aforementioned Coalition Against Nuclear Bailouts. In particular, API sees propping up nuclear as a threat to shale gas development and the jobs it provides. Erica Bowman, API chief economist, said:

"We do not need to subsidize uneconomical nuclear generation facilities in Ohio for job creation. In fact by mandating such subsidies we could diminish job creating investment in Ohio's natural gas and drive away manufacturing as well, which is making a resurgence in the state due to low cost electricity."

There’s something entertaining about titans tangling.

Different state, same sneaky tactics

We’ve mentioned that Ohio isn’t the only state where FirstEnergy is trying to make customers pay for its bad business decisions.

The utility is trying to transfer a coal power plant from an unregulated FirstEnergy affiliate to a regulated subsidiary in West Virginia. The move into regulated territory would guarantee profits for the company.

If that smells of sneaky corporate cronyism, you’re not the only one getting a whiff. Multiple power providers are protesting the transfer, and questioning why FirstEnergy should get financial protection from the competitive market. Longview Power President and CEO Jeffery Keffer said, "Longview has to try every day and sell into the power grid and make sure our costs are lower than revenues — we compete. [FirstEnergy] will be in a position where they don’t have to anymore.”

And if FirstEnergy doesn’t have to compete, it doesn’t have to worry about keeping electricity prices low. Whether in West Virginia or Ohio, FirstEnergy always tries to come out on top – and make its customers lose.

The ghost of FirstEnergy past

It’s a shame when old words come back to haunt you.

Recently, FirstEnergy has been complaining about how difficult it is to compete in Ohio’s deregulated electricity market. (The real reason for FirstEnergy’s struggle, of course, is not the competitive market itself, but clunky, old generators that can’t keep up with innovation.)

The utility used to sing a different tune on the subject, as Dynegy CEO Robert Flexon pointed out in recent testimony. Flexon “concluded with an argument – not his, but FirstEnergy's – that best summed up his position,” according to Columbus Business First. He read this 2011 quote from FirstEnergy:

"First, with respect to electric generation, competitive markets work. They deliver the lowest price over the long term to customers, and the proof is undeniable. Second, measures that restrict customer shopping or subsidize one electric generator over another are throwbacks to monopoly regulation. Such efforts that pick ‘winners’ and ‘losers’ in the energy market would create obstacles to private investment in generation and increase prices for customers ... more important, all of (FirstEnergy’s) generation-related investments – including the risks that accompany them – are now borne by (FirstEnergy) shareholders and not by customers."

The proof is undeniable. Mic drop.