FirstEnergy Files Settlement for Ohio Power Plants, Dynegy Opposes

 FirstEnergy Files Settlement for Ohio Power Plants, Dynegy Opposes

FirstEnergy Corp. (NYSE: FE) filed a comprehensive settlement with the Public Utilities Commission of Ohio (PUCO) for the utility’s proposed Electric Security Plan, but another company is speaking out against the agreement.
The settlement filed by FirstEnergy’s Ohio utilities - Ohio Edison, The Illuminating Company and Toledo Edison - outlines an eight-year rate provision associated with a power purchase agreement (PPA) with baseload power plants in the state designed to protect customers against rising retail prices and market volatility. The agreement includes the Davis-Besse Nuclear Power Station in Ohio, the W.H. Sammis Plant in Ohio and a portion of the output of Ohio Valley Electric Corp. units in Ohio and Indiana.
The agreement also establishes a goal to reduce carbon dioxide emissions in six states by at least 90 percent below 2005 levels by 2045, and provides more than $102 million to help low-income customers with paying their bills and energy efficiency programs.
“The proposed settlement is expected to deliver significant benefits to customers, protect thousands of family-sustaining jobs and vital tax revenues in Ohio communities, and provide for a cleaner energy future,” said Charles E. Jones, FirstEnergy president and chief executive officer. “The agreement also illustrates that a wide variety of parties support FirstEnergy’s proposal and agree that it will serve the best interests of Ohio electric customers.”
American Electric Power (AEP, NYSE: AEP) has filed a similar case with PUCO for power purchase agreements for the remaining life of its four coal-fired plants in Ohio. Dynegy President and CEO Robert Flexon has openly opposed both deals, saying they only harm competition and customers, and reward unprofitable nuclear and coal-fired plants in the state. No decision has been made yet on the AEP case.
Dynegy, which purchased nine power plants in the state from Duke Energy (NYSE: DUK), responded that FirstEnergy has been awarded more than $2.3 billion in revenues over the next three planning years from the PJM Capacity Auction with all of their power plants clearing the auction. The company also said the plants are obligated to run through May 31, 2019, so there is no immediate risk of shutdowns.
“The fault of FirstEnergy’s inability to compete in Ohio lies with FirstEnergy and it should not be dependent on the citizens and businesses of Ohio to provide a bail-out,” Flexon said. “Dynegy will pursue all available avenues, including litigation, to prohibit  the power purchase agreement from being enacted so as not to compromise the competitive market design, and we strongly encourage the PUCO commissioners to oppose and vote down this adverse anti-market policy.”

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