Energy / FirstEnergy

Davis-Besse, Perry nuclear plants could close as FirstEnergy inks deal with hedge funds

The Davis-Besse nuclear power plant near Oak Harbor.

CLEVELAND – Four high-powered private investor groups have agreed to sink nearly $2.5 billion into FirstEnergy for 18 months in exchange for helping the company shed its money-losing power plants, or get them returned to regulation and protection from competition.

FirstEnergy Solutions owns the Davis-Besse, Perry nuclear power plants in Ohio and the two-reactor Beaver Valley nuclear power plant in western Pennsylvania. The company also owns two large coal-fired plants on the Ohio River.

The hedge funds will advise the company on how to re-organize itself and its unregulated subsidiary FirstEnergy Solutions or help transform it, if FirstEnergy Solutions files for bankruptcy protection as expected, the company said.

The Akron-based utility Monday announced that the four private investment groups would buy $2.5 billion in FirstEnergy shares — $1.62 billion in preferred stock and $850 million in common stock. After 18 months, the investors must convert their preferred stock into common stock, which they may sell.

— John Funk, Cleveland Plain Dealer

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