FirstEnergy’s Jones touts plan to safeguard Sammis, Davis-Besse power plants

FirstEnergy (NYSE: FE) President and CEO Charles E. Jones said in a speech at the company’s May 19 annual meeting of shareholders that a plan now before the Public Utilities Commission of Ohio to protect the coal-fired Sammis plant and the Davis-Besse nuclear facility is a good one for Ohio ratepayers.

“Here in Ohio, in August of last year we filed our fourth Electric Security Plan called Powering Ohio’s Progress,” Jones said. “This plan includes a Purchase Power Agreement, or PPA, that will help ensure two of our baseload power plants – Davis-Besse and Sammis – remain in service for years to come, supporting 24/7 grid reliability as well as family-sustaining jobs and economic development in Ohio. We are encouraged that the Public Utilities Commission of Ohio has ruled that a rate mechanism associated with PPAs is legal, and we believe our plan meets the criteria established by the PUCO and represents the best interests of Ohio and our customers.

“Let me make one thing clear: This is not a bail-out of our generation business. This plan was filed by our regulated Ohio utilities as a way to secure reliable and affordable supplies of electricity over the long term for the 2.1 million customers they serve. If those plants should close, customers could experience less-reliable service and higher prices – including up to $1.1 billion in transmission upgrades that would be needed to help ensure grid stability.

“Beyond the several thousand Ohio jobs these plants sustain, Davis-Besse and Sammis also help ensure the diversity of our state’s energy resources. And we already saw the consequences of a less-diverse energy mix during the Polar Vortex of 2014, when record winter demand – combined with a heavy reliance on natural gas – contributed to huge price spikes and nearcrisis conditions on our electric system. Our regulated rate plans reflect a basic reality of our business: Our Ohio utilities are obligated by law to ensure we have the resources needed to maintain and operate a system that provides customers with the reliable and affordable service they expect and deserve – today and in the future.”

In a time of low power marketing pricing and market turmoil, this plan and others like it offered to the PUCO by companies like American Electric Power (NYSE: AEP) are seen as a key way to protect aging, baseload power plants. In deregulated Ohio, the PUCO has limited options in dealing with the continued viability of in-state power plants. Notable is that the FirstEnergy proposal to the PUCO also includes the company’s ownership shares of the coal-fired Kyger Creek and Clifty Creek power plants.

Later in the May 19 speech to shareholders, Jones touched on the company’s drive to develop cleaner energy sources.

“Customers expect their energy to come from clean sources – and we have a good story to tell here as well,” he noted. “Nearly 100 percent of the power we produce this year is expected to come from low- or non-emitting sources. And, with the deactivation of a number of older, coal-based units, and improvements in the efficiency of our nuclear units, we are reducing emissions of carbon dioxide across our fleet. In fact, this year we expect to achieve a 25 percent reduction below 2005 levels of carbon dioxide emissions. Since 1990, we have reduced emissions of nitrogen oxides by more than 80 percent, sulfur dioxide by more than 90 percent, and mercury by about 70 percent. In addition, we now offer more than 1,900 megawatts of renewable resources, and we are one of the largest wind energy providers east of the Mississippi River.”

FirstEnergy in the last three years has shut, or is currently in the process of shutting, several coal-fired power plants, including: Hatfield’s Ferry and Mitchell in Pennsylvania; Lake Shore and Ashtabula in Ohio; and Rivesville, Albright and Willow Island in northern West Virginia.

Five coal-fired units in Ohio of FirstEnergy were deactivated in the first half of April alone, said an April 16 version of PJM Interconnection‘s unit deactivation list. The list doesn’t actually identify the involved power plant owner, but it has been well known that FirstEnergy planned to deactivate these units around the time of the April 16 initial compliance deadline under the federal Mercury and Air Toxics Standards (MATS). The deactivated FirstEnergy units are:

  • Ashtabula Unit 5, 244 MW, deactivated on April 11;
  • Eastlake Unit 1, 132 MW, April 9;
  • Eastlake Unit 2, 132 MW, April 6;
  • Eastlake Unit 3, 132 MW, April 10; and
  • Lake Shore 18, 245 MW, April 13.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.