FirstEnergy loses $1.1B, may sell Pleasants plant to MonPower
After announcing a quarterly loss of $1.1 billion because of the future closures of two uncompetitive coal-fired power plants in Ohio, FirstEnergy says it will seek to “de-risk” by pushing plants onto electricity customers in states like West Virginia.
Charles Jones, CEO of FirstEnergy, the parent company of MonPower and Potomac Edison, announced in an earnings call on July 29 that the coal-heavy utility would seek to remove itself completely from the competitive energy business and, in the meantime, would try to offload plants to regulated markets, where the company is guaranteed a profit.
“Longer-term, we do not believe competitive generation is a good fit for FirstEnergy and we are focused on regulated operations,” Jones said. “We cannot put investors and our company at risk.”
West Virginia likely will play a big part in that corporate strategy. Jones made it clear in another earnings call earlier this year that the Akron-based business wants to sell the Pleasants power plant, north of Parkersburg, to its subsidiary companies in West Virginia.
The proposed transfer of that coal-fired plant, which would shift the risk of the 36-year-old generating station off of investors and onto electricity customers in the northern half of the state, has already prompted opposition from groups like the Sierra Club, West Virginia Citizen Action Group and the state government’s Consumer Advocate Division.
Those groups took issue with the company’s integrated resource plan — a 15-year energy and demand forecast — that was presented to the West Virginia Public Service Commission earlier this year.
The plan had reported that an existing coal-fired power plant (now known to be Pleasants) would be the cheapest generating option for customers and that electricity demand for MonPower and Potomac Edison was expected to increase by 2.2 percent, largely because of the natural gas industry in the state.
Late this week, the Consumer Advocate Division and the PSC’s staff called on FirstEnergy to file a formal request for proposal that would require the company to compare other energy sources, including new or existing wind, solar and natural-gas plants.
“The staff and CAD believes that these companies, especially in light of the inexorable collapse of the coal industry driven primarily by the availability of cheaper and more plentiful natural gas, continue to rely on acquisition practices that are not in the best interests of the consuming public and the economy of the state,” their lawyers said.
Results from the PJM Interconnection, a regional transmission organization that manages the energy market for 13 states, including West Virginia, seem to contradict the company’s findings in its resource plan, too.
Market results show that, between 2014 and 2015, regional electricity sales from coal-fired power plants dropped by 17.8 percent in the PJM. Gas-fired power plants sold 28.4 percent more in 2015 than they did the year before, and even more efficient gas-fired plants are set to come online in the coming years.