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Pennsylvania nuclear corporation looks to tax-payer funding to save the industry

FirstEnergy looks to the feds for help with coal and nuclear By Anya Litvak / Pittsburgh Post-Gazette The future of FirstEnergy’s coal and nuclear power plants in Pennsylvania and Ohio now is being assessed through the lens of a speedy federal study which, it is widely understood, is looking for ways to prop up coal and nuclear plants.

Chuck Jones, the CEO of Akron-based FirstEnergy Corp., said the company’s subsidiary that operates those plants has delayed a decision on filing for bankruptcy until the Department of Energy releases a study it commissioned two weeks ago.

The study which, among other things, is meant to explore “the extent to which continued regulatory burdens, as well as mandates and tax and subsidy policies, are responsible for forcing the premature retirement of baseload power plants,” is supposed to be done by June 19.

“I think the administration is serious about this,” Mr. Jones said during a call with analysts on Friday. “Our Washington team tells me that this is a very serious initiative. If their intention is to keep these fuel-secure base load assets from closing then they’re going to have to do something to make sure that there’s a financial incentive for these plants to not close,” he said.

Mr. Jones said he’s traveled to Washington D.C. to discuss this matter with representatives of the Trump administration and officials at the Department of Energy.

“And I’m sure this also clearly ties in to one of the President’s key initiatives, which is to protect our coal natural resource and the mining and jobs that go along with that,” he said.

Another government solution that could impact the company’s bankruptcy considerations is a set of bills moving through the Ohio legislature that would to subsidize nuclear plants through zero emission nuclear credits. If enacted, the measures would give FirstEnergy’s two nuclear power stations in Ohio $300 million in annual income.

But that alone won’t be enough to ward off bankruptcy, Mr. Jones cautioned. What it will do, he said, is give those plants a better chance of being scooped up by a buyer during a bankruptcy proceeding.

While he did not address efforts brewing in Pennsylvania to explore nuclear subsidies, he said the way the Ohio legislation is currently written, the Beaver Valley nuclear plant might qualify for credits across the state line.

It’s unusual for financial analysts to throw as much cold water on a company’s narrative as was spilling every which way during FirstEnergy’s earnings call on Friday.

Some questioned whether the Department of Energy has the power to enact measures that would help coal and nuclear plants directly. Others said that even if the DOE study does produce a policy framework, it will likely trigger involvement from other federal agencies, stretching the timeline for implementing any helpful measures……..

What’s clear is that the current system isn’t working, he said, because FirstEnergy’s power plants aren’t making enough money to stay alive. In its quarterly report, FirstEnergy said “prolonged decrease in demand and excess generation supply” compelled it to close more than half of its generation capacity in recent years……..

Stu Bresler, senior vice president of operations and markets at PJM, recently told Pennsylvania’s nuclear caucus that if all of the state’s nuclear plants were to shut down — a scenario he believes is unlikely — the grid would remain reliable.

Anya Litvak:


April 29, 2017 - Posted by | politics, USA

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