Energy / FirstEnergy

Crain’s editorial: Power play

Photo by RICH WILLIAMS

CLEVELAND — “There’s no doubt FirstEnergy Corp. finds itself in a serious financial crunch. But Ohio legislators should proceed with caution when it comes to the Akron company’s desire for so-called “zero emission credits” (ZEC) for its nuclear plants in the state.

FirstEnergy reported a loss of $6.2 billion, or $14.49 per share, in 2016, which included a $9.2 billion asset impairment charge. Bankruptcy is not out of the question for the company’s nuclear plant-operating FirstEnergy Solutions subsidiary, which has about $1.5 billion in book value but carries about $3 billion in debt on its balance sheet.

…FirstEnergy already got a bailout last fall — albeit not as large as it wanted — related to its coal-fired plants when the Public Utilities Commission of Ohio ordered the company to establish a distribution modernization rider that will provide it with an extra $132.5 million a year for three years, with the possibility of a two-year extension.

The addiction to subsidies is not serving Ohio residents well, as they continue to prop up old power-generation sources at the expense of fully committing to development of renewable energy. The subsidies underscore the broader problem for FirstEnergy, which is that it remains disproportionately reliant on inefficient coal and nuclear plants in an era marked by abundant and cheap natural gas.

Another problem with the ZEC plan is that subsidizing uncompetitive nuclear plants could create complications for existing competitive markets.”

— editorial, Crain’s Cleveland Business

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