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THREAD: With yesterday's bombshell news about Speaker Householder and friends, I thought it might be interesting to revisit some of Company A... err... FirstEnergy's earlier attempts to secure customer bailouts for its uneconomic coal and nuclear plants.
As complaint lays out, the 2016 financial prospects for FirstEnergy's nuclear plants--Davis-Besse and Perry--were grim. That's true but the prospects had already been bad for a while, at least at Davis-Besse (and the Sammis coal plant) and that led FE to look to the PUCO.
In late summer 2014, FirstEnergy filed at PUCO (case 14-1297) to secure customer funded bailouts for Davis-Besse, Sammis, and the company's affiliate stake in the OVEC coal plants. This was part of a series of Ohio regulated utilities seeking bailouts for uneconomic generation.
You can check out 14-1297 here, FE's original filing is waaaaaaaaay at the bottom. This docket overall tells the full history of FE's bailout efforts pre-HB6. https://dis.puc.state.oh.us/CaseRecord.aspx?Caseno=14-1297&link=DIVA
"But why is this a big deal? Plenty of other utilities force customers to pay for uneconomic generation."
True in other states but not here. Ohio is a deregulated state. Regulated utilities like FE should not be able force customers to pay for generation owned by affiliates
True in other states but not here. Ohio is a deregulated state. Regulated utilities like FE should not be able force customers to pay for generation owned by affiliates
FirstEnergy's bailout request was met by INTENSE public opposition. Over the course of the case, thousands of public comments were submitted opposing FirstEnergy's efforts. @OHIOcitizenact can tell the story about what it was like knocking on doors and hearing that opposition
Check out the public comments section of 14-1297. You can see the same anger and frustration towards bailing out the uneconomic plants. A lot of those same feelings and arguments were echoed throughout HB6
https://dis.puc.state.oh.us/CaseRecord.aspx?Caseno=14-1297&link=COM
https://dis.puc.state.oh.us/CaseRecord.aspx?Caseno=14-1297&link=COM
"FirstEnergy rate plan pummeled during PUCO hearing as 80 demand to testify"
Plain Dealer headline from Cleveland public hearing on FirstEnergy's first bailout attempt really stands out. Customers have LONG opposed paying more to bail out FE's plants. https://www.cleveland.com/business/2015/01/firstenergy_rate_plan_pummeled.html
Plain Dealer headline from Cleveland public hearing on FirstEnergy's first bailout attempt really stands out. Customers have LONG opposed paying more to bail out FE's plants. https://www.cleveland.com/business/2015/01/firstenergy_rate_plan_pummeled.html
These hearings often started with some local non-profit reps testifying about FirstEnergy being a good corporate citizen. @EnergyandPolicy has previously written about how FE using corporate giving to influence politics https://www.energyandpolicy.org/strings-attached-how-utilities-use-charitable-giving-to-influence-politics-increase-investor-firstenergy/
Despite the intense public opposition, PUCO eventually approved FirstEnergy's bailout request but that wasn't the end of the story.
Note: next few tweets feature stories by @JohnCFunk He's followed FE for years and is the utility reporting GOAT https://www.cleveland.com/business/2016/03/puco_approves_firstenergy_and.html
Note: next few tweets feature stories by @JohnCFunk He's followed FE for years and is the utility reporting GOAT https://www.cleveland.com/business/2016/03/puco_approves_firstenergy_and.html
Opponents challenged PUCO's decision at FERC arguing FirstEnergy had "overstepped its authority by guaranteeing profits for power plants competing in interstate electric markets." https://www.cleveland.com/business/2016/04/power_battles_will_continue_in.html
FERC subsequently overturned FirstEnergy's bailout. Woo, customers win! Well, unfortunately, no. FirstEnergy then went back to PUCO to try again. https://www.cleveland.com/business/2016/04/ferc_rejects_puco_approval_of.html
Here's our ( @SierraClub) press release at the time. Shoutout to my colleague @DanSawmiller who was leading the @OhioBeyondCoal team at the time and his efforts to make the Edgar test understandable https://content.sierraclub.org/www/press-releases/2016/04/sierra-club-responds-ferc-decision-coal-bailout-attempts
SO, FirstEnergy went back to PUCO and ended up w/ a NEW $200 million a year subsidy (rider DMR) for up to five years! FE argued it *needed* money to improve its credit rating... a different argument from what it originally claimed in 2014 https://www.cleveland.com/business/2017/08/puco_rejects_challenge_to_firs.html
Once again, opponents challenged, this time to the Ohio Supreme Court arguing there was no real oversight on how the money would be spent (sound familiar?). Now, as Ohio energy nerds know, challenges take time so while appeals began immediately, the court didn't rule till 2019
Apparently not satisfied with $200 million a year from PUCO, it was, of course, in this period FirstEnergy began eyeing the Statehouse.
Others are covering the legislative issues but @AndrewJTobias put together the definitive pre-complaint analysis https://www.cleveland.com/news/g66l-2019/05/ce7f1b02ee6954/nuclear-bailout-bill-shows-how-big-money-can-be-put-to-work-in-the-ohio-statehouse.html
Others are covering the legislative issues but @AndrewJTobias put together the definitive pre-complaint analysis https://www.cleveland.com/news/g66l-2019/05/ce7f1b02ee6954/nuclear-bailout-bill-shows-how-big-money-can-be-put-to-work-in-the-ohio-statehouse.html
So, back to the Oh Supreme Court!
Summer 2019, the Court struck down the rider because (surprise!) there were no guardrails on how FE could spend the money
Justice Donnelly: "The PUCO’s staff’s wishful thinking cannot take the place of real requirements https://www.cleveland.com/open/2019/06/ohio-supreme-court-nixes-firstenergy-electric-grid-charge.html
Summer 2019, the Court struck down the rider because (surprise!) there were no guardrails on how FE could spend the money
Justice Donnelly: "The PUCO’s staff’s wishful thinking cannot take the place of real requirements https://www.cleveland.com/open/2019/06/ohio-supreme-court-nixes-firstenergy-electric-grid-charge.html
Woo, customers win!
Well, again, no. Because there's no law in Ohio that requires utilities to refund customers when the Courts act, FirstEnergy got to keep all the money they'd collected to that point.
Well, again, no. Because there's no law in Ohio that requires utilities to refund customers when the Courts act, FirstEnergy got to keep all the money they'd collected to that point.
A lot of this got lost in the shuffle because by summer 2019, all eyes were on the Ohio legislature and the battle over HB6. A long, drawn out and complicated story about FirstEnergy's history with bailouts at PUCO was important background but not the headline
"So Neil, why is this important?"
Well, the past repeats itself! FirstEnergy has consistently demonstrated it's willing to flaunt rules and engage in practices that fly in the face of public support and interest. It's also willing to spend millions when the payoff is billions
Well, the past repeats itself! FirstEnergy has consistently demonstrated it's willing to flaunt rules and engage in practices that fly in the face of public support and interest. It's also willing to spend millions when the payoff is billions
The past is prologue. FirstEnergy has never been held fully accountable for its action and as a result, customers paid and those same actions continued. Now, with a criminal complaint alleging corruption at the highest levels of state government, we can't look away again.
FirstEnergy must be held accountable.
All those that engaged in a criminal conspiracy must be held accountable.
The Ohio legislature and Gov DeWine must take steps to rebuild public trust, and an immediate, necessary, first step is to #RepealHB6
All those that engaged in a criminal conspiracy must be held accountable.
The Ohio legislature and Gov DeWine must take steps to rebuild public trust, and an immediate, necessary, first step is to #RepealHB6
