Jan/Feb 2015 Newsletter:

Coal-Burning Power Plant Bailouts for FirstEnergy Ohio

A Summary of PUCO Case No. 14-1297-EL-SSO

Get involved!The Ohio General Assembly recently passed a new law that guts our renewable energy and energy efficiency standards, forcing Ohioans to rely more on dirty fossil fuels and pay more for electricity. FirstEnergy is now proposing to eliminate 85% of its energy efficiency programs, which are creating jobs and saving customers hundreds of millions of dollars. FirstEnergy’s effort to end these programs is particularly galling given that the company was also penalized over $40 million for overcharging its customers for renewable energy credits.

Lobbying to enact this new law, however, was not enough for FirstEnergy. The Company has filed an electric security plan (ESP) application before the Public Utilities Commission of Ohio (PUCO), through which the company seeks to bail out old, dirty coal plants in Ohio. As a part of its application, FirstEnergy is asking permission to force its customers to guarantee revenues to its 55-year old Sammis coal plant in Stratton, Ohio, through 2031. FirstEnergy would like to force its customers to pay all operating costs along with guaranteed profits to its subsidiary, FirstEnergy Solutions. If the PUCO approves this sweeping request, all customers of Cleveland Electric Illuminating, Ohio Edison, and Toledo Edison will pay a new unavoidable charge on their monthly electric bills.

The Sammis coal-burning power plant is burdened with economic and societal costs that are making it increasingly difficult to compete on the free market. The facility ranks as the 21st largest source of carbon dioxide emissions in the entire country and is also a major source of toxic air pollutants such as sulfur dioxide and nitrogen oxides, contributing to serious health issues like asthma and lung disease. And the owners of the plant are literally sending millions of dollars out of Ohio each year to keep the plant going: the Sammis plant spent $290 million in 2008 alone to purchase coal from other states. Sammis sends more money out of state to procure coal than does any other power plant in Ohio.

The proposed charges are designed to eliminate all of the competitive market risks for FirstEnergy Solutions, the owner of the coal-burning units at Sammis and the nuclear facility Davis-Besse, by forcing those risks onto the monthly electric bills of FirstEnergy’s monopolized customers. The proposal is estimated by FirstEnergy to cost a small residential electricity user more than $71 over the next three years. All benefits will accrue to the FirstEnergy Companies. Thousands of electric customers have already opposed FirstEnergy’s requests. Similar requests by American Electric Power and Duke have also drawn criticism from some of Ohio’s largest employers like Macy’s, Lowe’s, and Staples as well as the PUCO Staff because bailing out uneconomic coal plants will increase business costs and interfere with the competitive free market. If these costs are approved, those employers may be required to cut jobs to pay for rising electric bills.

Along with business and consumer groups and thousands of individuals, Sierra Club is urging PUCO to deny FirstEnergy’s request to increase customers’ bills to pay for coal plants that can’t compete in a free market. For information on how to get involved contact Neil Waggoner at (614) 484-7033 or Neil.Waggoner@SierraClub.org.