FirstEnergy / Ohio Utility Bailouts

FES and FE have created a ‘scheme’ that is an ‘abuse of the bankruptcy system’: Feds say

Federal authorities have charged in bankruptcy court that the deal struck between FirstEnergy and FirstEnergy Solutions absolving FE of any future responsibilities for power plant environmental problems is a “scheme” and “abuse of the bankruptcy system.” The charges come a year after FES filed for Chapter 11 bankruptcy protection.

CLEVELAND — “In furious filings at the start of this past weekend, attorneys for federal and state Environmental Protection Agencies tore apart the arrangement that FE and FES made last fall in which the parent promised nearly $1 billion in cash and commitments in exchange for FES absolving FE from future environmental damages.

The companies want to include the settlement in the bankruptcy case.

The Ohio Consumers’ Counsel also objected, arguing that under the plan before the court that ‘FirstEnergy would be shielded from any claims or causes of action related in any way to the Debtors’ businesses and property, including from any liability for the costly decommissioning of its power plants.’

The OCC also suggested that if the court were to approve a restructuring deal with the FE-FES settlement included the ruling would shield FirstEnergy and ‘leave Ohioans with too little protection.’

‘Were funds for decommissioning to be inadequate, for example, consumers or taxpayers might be (unfairly) called upon to fund FirstEnergy and FES’s power plant decommissioning liabilities to federal and state governments.'”

— John Funk, The Plain Dealer 

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