FirstEnergy Considering Divorce From The Generation Business

Officials from FirstEnergy, owner of three nuclear power plants in Ohio and Pennsylvania – the two-unit Beaver Valley Nuclear Power Station in Shippingport, Pa., the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio and the Perry Nuclear Power Plant in Perry, Ohio – said the company was considering the sale or closure of the remainder of its generating plants by the middle of next year.

In a conference call set up for investors a day before the company dramatically demolished the Lake Shore, Ohio, boiler house and sky-scraping smoker stack with a blast using 200 pounds of explosives, officials said that company was considering other dramatic measures to right their financial position, which included a loss of $6.2 billion in 2016. FirstEnergy is struggling in a deregulated market while participating in commodity auctions that have been undermined by low natural gas prices. In addition, the company said, its customer base shrank from 1.6 million in 2015 to 1.1 million in 2016.

Beaver Valley NPPIn the conference call, the company said that a reshuffling of assets to shore up its presence in regulated markets and reduce its presence in deregulated markets was “on track,” according to Power magazine.

The company has already announced that it would sell several coal and gas-fired facilities plus a hydro-power operation in Virginia in a $925 million deal with LS Power. The plants are all owned by Allegheny Energy Supply, a FirstEnergy company.

The company, however, is working on a deal to have the state of Ohio support its nuclear power facilities with a program that banks on the carbon-free attributes of nuclear power.

Similar to the renewable energy credits, the state would create Zero Emission Credits, called ZECs, which would likely bump customer bills by 5 percent, while providing $300 million in annual relief to owner of the nuclear plants. FirstEnergy said it would pursue the ZEC option whether or not it remained the owner of its three nuclear plants.

While the U.S. nuclear power industry remains in a state of stagnation or atrophy, the natural gas business is in a very different situation. There are currently four gas-powered generation plants in Ohio, reported Cleveland.com. And “seven or eight" new plants are seeking construction permits,” the news site said.

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