FirstEnergy asks for more time, more money on purchase of coal plant
Akron-based FirstEnergy on Friday blew through a regulator’s deadline for a report — and it told the regulator that it needed to rush through a $36 million annual rate increase in a matter of weeks if it wanted the analysis to go forward.
The West Virginia Public Service Commission on Dec. 30 ordered the Ohio utility to consider repurchasing the coal-fired Pleasants Power Station on the West Virginia side of the Ohio River southwest of Marietta.
It might seem like an odd request, given that FirstEnergy got the plant off of its books in 2020 as part of a massive bribery scandal. In addition, such a purchase would wreak havoc on the company’s commitment to cut greenhouse gas emissions by 30% before 2030. The purchase of Pleasants would instead add to its coal-fired generation portfolio by 40% — at a time when climate scientists are issuing warnings that are ever more dire.
But there’s heavy political pressure to keep the coal burning in West Virginia, which generates 90% of its electricity from that source — by far the most of any state. Gov. Jim Justice has publicly called to keep Pleasants open and both houses of the state legislature have passed resolutions to that effect.
Their advocacy comes after the 1,300 MW plant was scheduled to be shuttered by June and demolished after that. Coal-fired plants have mostly been uncompetitive as renewable sources have come on line and since the fracking boom reached a crescendo around 2010, making cleaner-burning natural gas relatively cheap.
It was FirstEnergy’s over-reliance on coal and two aging nuclear plants in Northern Ohio that led it to engage in a scheme to pay $60 million in exchange for a $1.3 billion bailout passed by the Ohio legislature in 2019, according to evidence in a federal court trial in Cincinnati. The case ended last month with the racketeering convictions of former Ohio House Speaker Larry Householder and former Ohio Republican Party Chairman Matt Borges.
Other parts of the company had been forced to spend billions propping up the plants, so in 2016 company leaders decided to put the subsidiary that held them through bankruptcy and then sell them off as part of a newly independent company, an executive testified.
FirstEnergy’s top leadership calculated that it would be a lot easier to sell off the generation plants if they had fat ratepayer subsidies attached to them. So starting in early 2017, the company began pouring its millions through a maze of 501(c)(4) dark money groups. The money was used to make Householder speaker, pass the bailout and to protect it from a repeal effort.
Shortly after the bailout passed in 2019, FirstEnergy added the Pleasants plant to the subsidiary going through bankruptcy.
After it emerged in February 2020 as part of the newly independent company, Energy Harbor, Pleasants was slated for closure. But then the state’s Public Service Commission asked FirstEnergy to study the feasibility of absorbing Pleasants into its Mon Power subsidiary and continue operating it.
Sweetening the pot, it was part of an order granting a $92 million rate increase. Some observers said the deal might also be attractive to FirstEnergy because it would be a chance to shift environmental and other liabilities onto West Virginia ratepayers, but that apparently wasn’t sufficient.
In a filing Friday, FirstEnergy said it needed more time to study the feasibility of taking back the coal plant. It also said that coal-fired generation is again unprofitable.
The price electricity is fetching on the wholesale market is down 54% since October and natural gas prices that have such an impact on electricity costs is down 58%, the filing said.
That’s in contrast to what another Ohio utility — AEP — said late last month in defense of subsidies it’s receiving as part of the utility bailout. It said coal plants provide “price stability” after war in Ukraine and other factors forced gas prices to spike last year before dropping closer to their 10-year average.
FirstEnergy told West Virginia regulators that to seriously study whether it makes sense to keep Pleasants open it’s going to need yet more ratepayer money — $3 million a month — as “early as possible, but no later than April 25, 2023.”
It added, “Due to the potential closure of Pleasants by June 1, 2023, time is of the essence and urgency in action is required if the commission wants Mon Power to continue to evaluate the possibility of acquiring Pleasants.”
The company said that if it doesn’t get the money, the Pleasants Power Station likely would pass a point of no return.
“Once a station is closed, it is very difficult to restart,” the filing said. “Employees are no longer available. There is not an experienced, capable staff to operate the complex machinery that is part of a power station. Restart of boilers, turbines, transformers and auxiliary equipment that have gone ‘cold’ is at best uncertain.”
This story was republished from the Ohio Capital Journal under a Creative Commons license.
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