FirstEnergy, First in Fleecing Consumers

Ohio Consumers are paying big for FirstEnergy’s maneuvers to profit from its failing and outdated business model.

Billion in Bailouts monopoly-money-firstenergy-bailout

Today, the Public Utilities Commission of Ohio will begin hearings on FirstEnergy’s proposal to guarantee profits for its oldest and dirtiest coal and nuclear plants.

Unable to compete in the energy market due to cleaner and more affordable resources like wind and solar, FirstEnergy is asking regulators to force regulated utilities to buy the entire output of FirstEnergy’s troubled nuclear and coal plants – Davis-Besse nuclear plant, Sammis coal plant as well as its share of coal-fired energy produced by the Ohio Valley Electric Corporation – and then sell the power into the marketplace. Customers would be charged for the difference between what the market will pay and the cost to operate the plants, plus profit. The scheme would be a bailout for FirstEnergy, impose a $3 billion dirty energy tax on customers and discourage investment in clean and efficient energy.  

Not only would the bailout proposal raise rates, it also would lock in the subsidy for 15 years. At a time when climate disruption demands that we phase out our old, dirty energy sources, FirstEnergy is asking customers to prop up theirs for years to come.

Further, the scheme would essentially circumvent the state’s deregulation laws – a policy FirstEnergy championed until it was no longer serving its bottom line. Deregulation, which split the distribution of power from the business of generating power so that utilities could sell energy into a competitive market, initially cost customers billions of dollars. FirstEnergy convinced the PUCO that it needed customers to absorb the debt (bail out) on its plants to be competitive in the new market system. FirstEnergy was allowed to charge Ohio electricity consumers $6.9 billion for its nuclear assets alone.

But FirstEnergy self-serving flip-flop on competition doesn’t end there.

Millions in Lost Efficiency Savings

Last year, FirstEnergy led the lobbying effort to freeze Ohio’s renewable and energy efficiency standards, claiming that they inhibited competition and inflated energy costs. The efficiency standard alone saved customers $1 billion since its implementation in 2009 and was on track to save billions more in coming years. In response to the freeze, FirstEnergy was the only utility in the state to take immediate steps to cut its efficiency programs, even though its own PUCO filings have consistently argued that its programs are cost-effective. For example, one document filed in 2012 projected savings of more than $100 million for FirstEnergy’s Ohio Edison customers.

And that still doesn’t complete FirstEnergy’s record on fleecing customers.

Millions in Overcharges

Two years ago, the company was penalized more than $40 million for overcharging its customers for renewable energy credits. The year before that, FirstEnergy gamed the capacity auction for the territory in which it operates to increase their profits through strategic closing of coal plants. Doing so created capacity shortages and prices increased for customers.

More Cost to Come?

Instead of innovating to meet the challenges of climate disruption and embracing the plummeting cost of clean energy, FirstEnergy is doubling down on coal and nuclear. And by doing so and resisting low cost tools like energy efficiency, FirstEnergy could make it harder and more costly for the state to comply with new federal carbon pollution goals.

It’s time to stop letting FirstEnergy call the shots on the Buckeye State’s energy future, a mistake that already has cost Ohio’s families and households and continues to threaten Ohio’s response to climate change.

Take action against FirstEnergy today:

Tell the Public Utilities Commission of Ohio (PUCO) to reject the bailout of FirstEnergy.

 Allison Fisher is the Outreach Director for Public Citizen’s Climate and Energy Program