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Environmental groups want the bankruptcy court to keep FirstEnergy on the hook for decommissioning and cleanup.
FirstEnergy Solutions’ bankruptcy should not excuse the company and its affiliates from the safe closure and cleanup of its power plants, environmental advocates say.
A motion by four environmental groups asks the bankruptcy court to make sure FirstEnergy and its subsidiaries — and not taxpayers or ratepayers — pay for decommissioning and cleaning up three nuclear power plants in Ohio and Pennsylvania.
“FirstEnergy is the parental guarantor to ensure that there are sufficient funds to fully and safely decommission the Davis-Besse, Perry and Beaver Valley nuclear plants,” said Howard Learner, executive director of the Environmental Law & Policy Center. “FirstEnergy should not be allowed to use the bankruptcy process to shift its financial obligation onto taxpayers.”
Other groups signing onto the bankruptcy court motion include the Environmental Defense Fund, Ohio Citizen Action and the Ohio Environmental Council. The groups want a go-ahead to continue regulatory proceedings relating to the nuclear plants. The companies also want to seek financial assurances to cover timely and responsible cleanup of coal ash disposal sites and sludge disposal ponds at the debtors’ fossil fuel plants.
Meanwhile, the Trump administration Friday offered a potential lifeline to FirstEnergy’s power plants that could change its decision to close them.
The environmental groups’ motion was filed last month, and Friday’s development does not immediately affect their plans.
“While we expect the courts to object, we continue to focus on FirstEnergy’s bankruptcy plea and want to ensure the company doesn’t avoid its decommissioning and clean-up responsibilities associated with its three troubled nuclear reactors,” said Dick Munson, Environmental Defense Fund director for Midwest Clean Energy.
ELPC and other groups received similar relief in the Peabody Coal bankruptcy case, in which the bankruptcy court required that company to purchase bonds to ensure performance of its environmental cleanup responsibilities.
In Learner’s view, the decommissioning should take place sooner, rather than later. “Decommissioning now will create (de-)construction jobs and will reduce the risks of fenced-off, radioactive sites in Ohio and Pennsylvania communities,” he said.
“FirstEnergy’s management’s maneuvers risk forcing taxpayers and ratepayers to hold the bag for the nuclear plant decommissioning costs and coal plant cleanup costs that are FirstEnergy’s financial responsibility,” Learner said.
On June 1 Donald Trump directed U.S. Energy Secretary Rick Perry to take “immediate steps to stop the loss” of so-called “fuel-secure power facilities.” Hours earlier, White House officials circulated a 40-page draft memo, arguing that shielding nuclear and coal plants from competition would “promote the national defense and maximize domestic energy supplies.”
FirstEnergy had asked the federal government to issue such relief on March 29, just hours after announcing the closure of the three nuclear power plants owned by its generation subsidiaries. Two days later, those subsidiaries filed for bankruptcy.
The directive “seeks an unprecedented, illegal government handout and we look forward to forcefully opposing it every step of the way,” said Michael Panfil, an attorney with the Environmental Defense Fund.
After Trump refused to issue such an order last summer, Perry told the Federal Energy Regulatory Commission to consider a proposed rule that would basically guarantee sales of all electricity from coal and nuclear plants within the PJM market that FirstEnergy’s generation companies operate in. Earlier this year, FERC found such a rule was not warranted.
No emergency exists today “that justifies such unprecedented executive branch intervention in the economic life of the country,” said John Shelk, president and CEO of the Electric Power Supply Association. Rather, the directive “needlessly raises costs for consumers and merely shifts the risk of premature retirement to newer, more efficient power plants that compete with coal and nuclear,” he said.
Energy analyst Rob Gramlich at Grid Strategies LLC also took issue with the directive and draft memo’s references to resilience.
“Coal and nuclear plants fail when there are grid disturbances affecting frequency or voltage more than a certain level, while wind plants don’t,” he said. In contrast, federal regulators have higher reliability standards for wind generators, he added.
Objections to the environmental groups’ request in the bankruptcy court are currently due on June 6. A hearing on the groups’ request could take place as early as June 8.
The fate of FirstEnergy Solutions’ nuclear plants will take longer to determine. Legal challenges to the Trump administration’s actions are expected.
Prior uses of the emergency powers that Trump and Perry may rely on have covered “very limited instances,” such as major blackouts, hurricanes and other natural disasters, said attorney Rabeha Kamaluddin at Dorsey & Whitney’s Washington, D.C. office. “Without connecting the emergency to such things, this unprecedented plan will likely face challenges passing judicial scrutiny,” she said.
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