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Two Democratic lawmakers concerned about job losses in their southeast Ohio districts have spoken out in support of a FirstEnergy plan that critics say is an unlawful “bailout.”
In letters filed with Ohio regulators this week, state senator Lou Gentile (D-Steubenville) and representative Jack Cera (D-Bellaire) stressed the fact that FirstEnergy’s Sammis power plant employs 350 to 400 people in their area.
“The jobs sustained by this facility have a significant impact on the people, businesses, and communities of Jefferson County, and I remain committed to their success,” Gentile wrote.
As advocates see it, however, FirstEnergy’s plan does not assure that success.
“Rep. Cera and Senator Gentile are understandably concerned about the jobs and local tax revenue associated with uneconomic power plants in their district,” said Dick Munson at the Environmental Defense Fund. “What FirstEnergy doesn’t want to admit, however, is its latest subsidy proposal does nothing to guarantee that those plants stay open and those workers stay employed.”
FirstEnergy’s initial plan was to guarantee sales for all electricity from the Sammis plant, the Davis-Besse nuclear plant and FirstEnergy’s share of two 1950’s-era coal plants for 15 years. The Public Utilities Commission of Ohio approved a slightly modified version with an eight-year term this spring.
Soon afterward, federal regulators said they would require close scrutiny before letting the deal proceed. At that point, FirstEnergy asked the PUCO to let it still collect the new charges, but without any clear specification of how the company would use the money to provide a “hedge” for consumers.
Either way, challengers said the plan would likely cost Ohio ratepayers up to $4 billion. Then a filing by FirstEnergy last month suggested that amount could balloon to more than $8 billion. FirstEnergy also announced last month that it will close four of the seven units at the Sammis plant in May 2020.
Despite the changes, Gentile and Cera still believe the plan could help their districts.
The PUCO has “broad authority to implement strategies that are in the best interest of customers,” Cera wrote. “This includes protecting existing generation, like Sammis, where possible, and supporting Ohio corporate headquarters.” That last phrase refers to hints in an earlier filing that the company might move its Akron headquarters.
According to critics, belief that the plan would benefit customers is misplaced, and approval of the plan would be a mistake.
“If FirstEnergy’s $9 billion plan is approved by the PUCO, Representative Jack Cera’s and Senator Lou Gentile’s constituents will get sicker from dirty coal ash, they’ll pay more on their electric bills, and FirstEnergy will stay addicted to fossil fuels,” said Trish Demeter at the Ohio Environmental Council.
“All this with no guarantee that FirstEnergy will keep these people employed or these uneconomic plants will stay open,” she added.
Moreover, if FirstEnergy were to get an “additional amount” to compensate the company for the value of keeping the company headquarters in Akron, that could boost the total potential costs by yet another $4.5 billion over eight years, Munson noted. In his view, that would be bad for all Ohio ratepayers, including those represented by the two state lawmakers.
‘Fewer moving parts’
FirstEnergy’s latest filings this week continue to claim that the plan provides a valuable “hedge” for Ohio ratepayers even with any express agreements to buy power from the Sammis plant or other plants.
The plan now “will have fewer moving parts and, thus, will present less risk to customers,” the company’s brief claimed.
But deleting express mention of a power purchase agreement does not make the plan lawful or reduce its risks for customers, challengers argued.
“FirstEnergy should not be permitted on rehearing to reconstitute its request for noncompetitive subsidies in order to avoid FERC regulatory review designed to protect Ohio customers,” said the brief for Monitoring Analytics, the Independent Market Monitor for grid operator PJM.
Challengers also cited other reasons that the plan is beyond the PUCO’s authority.
For one thing, any potential “hedge” is not tied to retail electric service, explained the Sierra Club in its brief. Moreover, “this rider would not have the effect of stabilizing or providing certainty to customers’ bills,” the brief said.
As for a proposal by the PUCO staff to impose a charge to bolster FirstEnergy’s credit rating, the Office of the Ohio Consumer’s Counsel has said that “violates the law, harms consumers, and sets a precedent of dangerous public policy.”
FirstEnergy’s suggested expansion of that $400-million credit support plan is “grossly overstated and places too much responsibility on Ohioans to fund this unlawful bailout,” the brief added.
In short, challengers claimed, Ohio regulators don’t have the authority to approve FirstEnergy’s plan. Nor, in their view, would that be in the best interests of Ohio.
“FirstEnergy’s plan isn’t about moving Ohio forward,” Demeter said. “It’s about paying FirstEnergy for its bad corporate bets on expensive coal and nuclear plants.”
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