Coal / FirstEnergy

First Energy gets boost from closing coal plants

NEW YORK, NY — “Instead of complaining about clean air rules, maybe utilities should cheer them.

Sometimes, the rules lead to big gains.

First Energy, a utility based in Ohio, got such a boost Thursday, a week after the company announced it would close six coal-fired plants, blaming new federal rules aimed at slowing emissions of mercury and other toxins.

Without these plants, electricity prices in parts of Ohio dominated by First Energy are expected to nearly double at a power auction scheduled for May.

The reason: There will now be a smaller fleet of power plants available to meet potential power needs. This smaller supply means the price to coax companies like First Energy to make their plants available will rise.

Julien Dumoulin-Smith, an analyst at UBS, predicted rates would rise from $126 for every megawatt available per day to $200. For the 8,000 megawatts of power plant capacity owned by First Energy in the region, that would be an extra $216 million for the year covered by the auction.

Jonathan Arnold, an analyst at Deutsche Bank, said there’s a chance prices could approach $500, which would be an enormous windfall for First Energy.

First Energy shares rose 3.3 percent Thursday on a day in which the Dow Jones Industrial Average fell slightly.”

— Jonthan Fahey, Associated Press

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