FirstEnergy: Parent-Company Workers Won't Feel the Impact of Subsidiary's Bankruptcy for Now
Editor's note: This story has been updated to include a statement from the city of Akron.
Akron-based FirstEnergy’s subsidiary will be going it alone in its ongoing fight to get state and federal help to boost customers’ bills to keep its coal and nuclear plants operating. WKSU’s M.L. Schultze has more on what’s next.
FirstEnergy announced two years ago it planned to get out of its unregulated power-generating business, which depends largely on nuclear and coal, unless federal regulators or Ohio legislators stepped in. So far, they haven’t. So those long-term plans to cut FirstEnergy Solutions loose came to fruition with the bankruptcy filing this weekend.
FirstEnergy Corp.’s Tricia Ingraham says the company still believes subsidies are the right thing.
“We still think that it’s a good idea for Ohio and the nation to keep these base-load generating units in service so we do support that, but FirstEnergy Solutions will be taking this (issue) going forward.”
Ingraham says the 12,500 parent-company employees should be largely untouched by the bankruptcy, though the company is undergoing an up-to two year cost study focused primarily of the shared sides of the two businesses. A new spokesman for FirstEnergy Solutions, Tom Mulligan, wouldn’t comment on its 3,000 employees.
The decision by FirstEnergy to buy Pennsylvania-based Allegheny Energy eight years ago was regarded as a positive back then. But it’s regarded now as badly mistimed – an investment in a utility dependent largely on coal at a time when falling natural gas prices would undercut all other sources.
Ingraham says the deal still makes sense for the parent company, if not for the subsidiary, FirstEnergy Solutions:
“Nobody really knew that the natural gas boom was going to happen so it was really hard to predict at that point in time what would happen to energy prices. But part of that transaction also involved the acquisition of three new utility companies, which significantly increased the business that is going forward.”
That includes customers in Maryland, West Virginia and Pennsylvania. Earlier this year, the parent company, FirstEnergy Corp., got an infusion of $2.5 billion from an investment firm Elliott Management Corp.that’s helping it get out of the power-generation business.
The city of Akron, where FirstEnergy is based, issued the following statement on the bankruptcy and plans to shutter the David Besse, Perry and Beaver Valley nuclear power plants.
Here's the complete statement from Akron Mayor Dan Horrigan:
"In the City of Akron, we recognize First Energy as a key partner in both our economy and community, and offer our full support as they move forward with these unwelcome but necessary decisions. We are confident that the Chapter 11 process will afford First Energy Solutions the opportunity to engage in a strategic financial restructuring and emerge as a stronger entity going forward, while continuing to provide reliable service to their customers throughout the process.
While the potential deactivation of First Energy’s three Ohio nuclear plants will have a significant impact on their individual local communities, we know that the damaging ripple effects will be felt throughout the region. We join the leadership of FES in calling on elected officials at the state and federal level to find a legislative solution that will help protect this valuable source of reliable clean energy for Ohio customers, and we remain committed to supporting FES as they continue their efforts to prevent the long-term closure of these plants.”