Past free-market champ FirstEnergy wants Illuminating Co., Ohio Edison and Toledo Edison to buy all the power from the Davis-Besse nuclear power plant and the coal-burning W.R. Sammis plant, though it is more expensive than power generated by natural gas-fired plants.
FirstEnergy Corp. says it cannot guarantee the survival of its coal-fired W.H. Sammis power plant unless state regulators allow the company to have the Illuminating Co., Ohio Edison and Toledo Edison buy all of the power from Sammis and the Davis-Besse nuclear plant for 15 years at whatever it cost to generate, even if that cost is higher than power prices in wholesale markets. AKRON, Ohio -- FirstEnergy's next rate case is going to a full-scale hearing at the end of this month -- without the recommendations of state experts who should have already analyzed it.
The centerpiece of the case is a never-before-seen 15-year "power purchase agreement" between FirstEnergy's three traditional Ohio utilities -- the Illuminating Co., Ohio Edison and Toledo Edison -- and the unregulated FirstEnergy Solutions to buy all of the power generated by the Davis-Besse nuclear power plant and the coal-fired R.W. Sammis power plant at whatever it cost to produce. FirstEnergy Solutions now owns those plants.
Filed more than a year ago, the case has clogged the docket at the Public Utilities Commission of Ohio. Nearly 500 documents have been filed, including hundreds of pages of public opposition, in the case docket.
The proposed power purchase deal has consumer advocates and other power companies furious, but FirstEnergy has marshaled a phalanx of experts and company executives to say it would save consumers money in the long run.
It would also save Davis-Besse and Sammis from mothballs because the two power plants cannot compete against natural gas-fired plants that can produce power at much less cost. Chuck Jones, FirstEnergy CEO, sees the agreements as a kind of first step toward re-regulation.
The company, just seven years ago a champion of deregulation and open markets, has broadly hinted in its testimony that it cannot guarantee the future of the two old plants if the power purchase agreement is denied. The battle began before President Obama's announced his Clean Power Plan that would try to limit carbon dioxide emissions from coal-burning and gas-burning power plants.
The conflicting testimony puts the five voting members of the commission, including new chairman Andre Porter, at a watershed -- should they proceed with deregulation and deny the power purchase agreements or maneuver around what lawmakers put in place more than a decade ago and allow what FirstEnergy's critics say amounts to re-regulation, without real regulation.
The PUCO staff's role is to recap the arguments and then make its own recommendations. The staff has now missed two deadlines to do that.
But the case is going forward.
A PUCO administrative judge Tuesday presided over a pre-hearing of the case and reaffirmed the start of a full-blown hearing Aug. 31. That hearing is expected to last weeks.
Administrative Law Judge Gregory Price also orally agreed to "void" last Friday's staff report deadline that he had previously set.
In exchange, the staff has agreed to file its comprehensive report before any commission staffers have to testify -- but probably not before the Aug. 31 start.