With Ohio bailout law secured, FirstEnergy Solutions successor moves to increase share buybacks by $300 million
COLUMBUS -- "Leaders of a former FirstEnergy subsidiary, which Ohio electricity customers will soon begin paying $150 million annually to subsidize under a nuclear bailout law Ohio officials passed last year, have moved to spend an extra $300 million on repurchasing the company’s own stock.
The stock buybacks, meant to benefit corporate shareholders, come less than a year after an aggressive multi-year lobbying effort by FirstEnergy that culminated in Gov. Mike DeWine and state lawmakers approving $1 billion in bailout money funded by surcharges on Ohioans’ electric bills. The company and elected officials who backed the bailout argued without state money, the power plants and their parent company would become insolvent.
The board of directors for the company now known as Energy Harbor on Friday voted to increase authorization for its stock buyback program from $500 million to $800 million, according to an investor presentation the company posted to its website. Energy Harbor can buy back the stock any time until Aug. 27., under the terms of a company plan, approved as the Akron company spun off from FirstEnergy as it emerged from bankruptcy proceedings earlier this year."
-- Andrew Tobias, cleveland.com
read more
A dirty battle for a nuclear bailout in Ohio
A mailer sent to thousands of Ohio residents falsely linked the Chinese government to anti-bailout activists.
"The raw political and economic power of the industry was on display even after the bill was passed. Having been defeated within the legislature, grassroots organizations such as Ohioans Against Corporate Bailouts and Ohio Consumers Power Alliance took to the streets and tried to collect signatures on a petition calling for a referendum question about HB6 to be included in the 2020 elections. It was a tough task, since those opposing the bailout had less than two months to gather over a quarter of a million valid signatures.
FirstEnergy tried to stop them with a two-pronged approach. The first was a legal trick. It went to the state’s supreme court and argued that the monthly charges on customers 'should be considered tax increases, which cannot be challenged by a referendum.' But the court dismissed the case, saying there was 'no ‘justiciable controversy’ for it to decide.' For the main part, though, the response from FirstEnergy and other beneficiaries was more of the same: dark money–backed organizations spending millions to undo the grassroots efforts by urging voters to refuse signing the petition.
Among these organizations was one called Ohioans for Energy Security, which sponsored television advertisements that falsely claimed that China is 'intertwining themselves financially in our energy infrastructure,' threatening 'national security,' and implying that not going through with the bailout campaign would lead to Chinese control of Ohio’s power grid. The watchdog organization Energy and Policy Institute quickly identified that some of the people featured in the TV advertisement were in fact FirstEnergy employees. In other words, there was reason to suspect that FirstEnergy was behind the advertisement. Ohioans for Energy Security also mailed thousands of letters to state residents with bold lettering behind a Chinese flag imploring, 'Don’t give the Chinese government your personal information.' The hyperbolic allegations about China apparently are connected to natural gas-fired power plants in Ohio that were partially financed by a Chinese government-owned bank, although FirstEnergy has itself borrowed money from the same bank."
-- Shakiba Fadaie and M. V. Ramana, Bulletin of the Atomic Scientists
read more
Power struggle: Federal ruling calls into question Ohio's nuclear plant subsidies
Capacity power is electricity the grid keeps on reserve to meet its maximum load requirements. It's tapped into when the grid exceeds its base load and needs more juice. Power companies bid to provide that power at a set price. When the grid needs it, PJM begins buying the lowest-priced power and keeps buying more expensive power from other bidders until it has enough. Then, all of the capacity power providers get that last and highest price for all of the capacity power they provided.
FERC says allowing nuclear plants supported by state subsidies to bid into these auctions at lower prices than other nuclear plants could support is not fair. So, it's ordered PJM to set a minimum price at which Davis-Besse, Perry and other subsidized plants can bid in."
-- Dan Shingler, Crain's Cleveland Business
read more
In Ohio, shady front groups fight dirty to attack grassroots campaign against $1 billion nuke/coal bailout
"An ugly political war is raging in Ohio, pitting consumer and environmental advocates against big utilities and dark-money front groups that want to make electricity customers pay more than $1 billion to bail out failing nuclear and coal-fired power plants. The bad guys are fighting dirty, using deceitful scare tactics and alleged cash payoffs that are now under investigation by the state attorney general, to derail the anti-bailout campaign.
It’s a fight for the future of energy that could erupt in other states as utilities seek public subsidies to prop up their outdated, inefficient, dirty and dangerous power plants against competition from cheaper and cleaner solar and wind power. Figures compiled by EWG show that in the past three years, five states have handed utilities more than $15 billion in taxpayer-funded bailouts of failing nuclear plants.
This summer, Ohio utility interests spent almost $10 million to push through legislation to slap a surcharge on ratepayers’ monthly electricity bills in a move to subsidize two nuclear plants owned by FirstEnergy Solutions and two coal plants owned by Ohio Valley Electric Corp. Not only are the plants not needed to provide a secure supply of electricity but the bill would also effectively stop state renewable energy and efficiency mandates for utilities.
Republican Gov. Mike DeWine signed the bill. But a grassroots group, Ohioans Against Corporate Bailouts, wants to let voters decide whether to overturn the law."
-- Grant Smith and Bill Walker, Environmental Working Group (EWG)
