FirstEnergy still fighting to shield power plants from ‘uncertainties’ of competition
FirstEnergy’s request for an emergency order isn’t the only play to bolster coal and nuclear plants at customers’ expense.
It’s clear the lights will stay on in Ohio despite the bankruptcy of FirstEnergy’s generation subsidiaries. What’s less clear is how much electricity to run those lights will come from FirstEnergy power plants.
During an earnings call Monday, FirstEnergy President and CEO Chuck Jones stressed that he will continue to push for government measures to protect coal and nuclear generation from competition.
“We’re going to keep fighting for these plants,” Jones said.
FirstEnergy asked the Department of Energy for an emergency order to protect all coal and nuclear plants in the PJM territory just before its generation subsidiaries filed for bankruptcy. Proposals are also pending at the Federal Energy Regulatory Commission and in the Ohio legislature.
Approval of any of those plans could edge competitive suppliers out of the market and leave customers paying more.
Consumer advocates, environmental groups and economic analysts have hailed the potential benefits of competition for customers. Indeed, in Ohio, a major complaint has been that the state hasn’t yet fully moved to competition, but has continued to use electric security plans and other means to subsidize utilities’ affiliated generation.
On Monday, Jones characterized competition as an undesirable risk.
“More than 5 million of our utility customers are still exposed to the uncertainties of competitive markets,” he said. “Therefore, I will continue personally to advocate for regulatory or legislative solutions, including FES’s application for an emergency order under the Federal Power Act, that recognize the attributes of fuel secure baseload generation and to insure our customers continue to have a stable, reliable power supply.”
FirstEnergy’s emergency order request wasn’t limited to its own coal or nuclear plants. “They’re asking the DOE to declare that not just their power plants but every coal and nuclear unit in PJM should be given a profit guarantee,” said Dick Munson, director of Midwest Clean Energy for the Environmental Defense Fund. “If that is approved, it will destroy competitive markets. The boldness is just stunning.”
“It’s hard to dream up anything so anticompetitive,” agreed Devin Hartman, electricity policy manager at free-market research group R Street, based in Washington, D.C. By his count, about 80 plants could get protection under by FirstEnergy’s request, “and many of them probably would be retiring over the course of the next five years or so.”
“It’s just a Hail Mary attempt by a company going bankrupt,” Hartman continued. Even though FirstEnergy has announced its intent to exit the generation business, “they’re looking for ways to make sure that their assets get as much value as they can.”
Earlier this month, U.S. Energy Secretary Rick Perry said an emergency order is “not the only play” to prop up coal and nuclear plants.
One way to do that might be through “show cause” orders to regional grid operators, suggested Federal Energy Regulatory Commission Chair Neil Chatterjee. Basically, grid operators would have to prove why they shouldn’t keep noncompetitive coal and nuclear plants online. Chatterjee’s comments came after meeting with FirstEnergy representatives last November.
