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FirstEnergy bailout could head to Ohio Supreme Court

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Critics have accused the bailout of supporting FirstEnergy Solutions’ failing coal plants.

Electricity company FirstEnergy’s bailout could be headed to the Ohio Supreme Court, after several environmental groups filed a brief to the court.

The brief was filed by the Ohio Environmental Council, the Environmental Defense Fund and the Environmental Law and Policy Center against the Public Utilities Commission of Ohio. The groups argued that the FirstEnergy bailout, provided by PUCO, is unlawful.

Ohio law prohibits using the money to directly support the failing coal and nuclear plants, but FirstEnergy could do so indirectly,” John Finnigan of the Environmental Defense Fund said on the fund’s website.

FirstEnergy first filed for a bailout in 2014 to buy a supply of electricity at rates higher than the market from their subsidiary, FirstEnergy Solutions, and then sell the supply at a loss. The loss would then be passed onto FirstEnergy customers. FirstEnergy argued that without this bailout, plants could be shut down and service could be disrupted. PUCO approved this bailout before it was struck down by federal regulators in 2016.

PUCO could not be reached for comment.

After another failed bailout, PUCO proposed its own version of a bailout for FirstEnergy. This bailout would provide FirstEnergy with around $600 million to be generated by raising rates for their customers. The commission passed this bailout, stating that the money would help FirstEnergy update their electric grids.

The bailout has already generated around $163 million for FirstEnergy, according to the Environmental Defense Fund’s website.

FirstEnergy services much of Northern and Central Ohio, along with Pennsylvania, New Jersey, West Virginia, and Maryland. After PUCO modified the bailout to its current form, the company expressed concerns at the amount of money provided.

While we clearly demonstrated to the PUCO what is essential to ensure reliability for customers in the future, the amount granted is insufficient to cover the necessary and costly investments,” CEO of FirstEnergy Charles E. Jones said in 2016.  

“The decision also fails to recognize the significant challenges that threaten Ohio utilities’ ability to effectively operate.”

Critics have accused the bailout of supporting FirstEnergy Solutions’ failing coal plants.

According to the Environmental Defense Fund’s website, “FirstEnergy made a huge investment in coal, which crashed its profits and sent its emissions through the roof. In response, it is trying to kill the burgeoning clean energy industry and make ratepayers foot the bill.”

The Supreme Court of Ohio recently sided with FirstEnergy in a different case, deciding that PUCO could not force FirstEnergy to refund $43 million to its customers. At the time of reporting, it is unknown when or if the bailout case will be heard by the court.

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