FirstEnergy

FirstEnergy’s profits down, FirstEnergy Solutions could be forced into bankruptcy over dispute with railroads

When FirstEnergy closed its old Lake Shore power plant rather than try to update its pollution controls, the company found itself in a disagreement with railroad companies with which it had long-term coal delivery contracts. The railroads argued the company had broken its contracts when it shut down Lake Shore and other old plants and no longer needed the coal. A negotiated settlement is pending (Credit: Marvin Fong).

AKRON — “FirstEnergy Corp. says its profits in the first three months of the year were down compared to year-ago earnings, primarily because of expenses to settle railroad coal delivery contracts it no longer needs.

…The company on Thursday announced to investors in a Securities and Exchange Commission filing that that its subsidiary FirstEnergy Solutions had resolved one contract dispute with CSX Transportation, Inc. and BNSF Railway Co. and had agreed to pay them a total of $109 million in three annual installments, beginning Monday, May 1.

The rail companies had contracts to deliver coal to FirstEnergy power plants in Ashtabula, Eastlake and Cleveland’s Lake Shore plant. FirstEnergy closed them in 2015.

The SEC filing also noted that FirstEnergy was still negotiating with BNSF and Norfolk Southern over another long-term coal transportation contract. That one involved coal delivery to the company’s Bay shore plant near Toledo and to the W.H. Sammis plant on the Ohio River. Some boilers were closed at Sammis but the plant is still operating.”

— John Funk, Cleveland Plain Dealer

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