FirstEnergy seeks to strike arguments against income guarantee plan

FirstEnergy’s latest filings with Ohio regulators seek to limit what challengers can say in arguing against a plan to guarantee profits for certain power plants.

Last Friday FirstEnergy asked the Public Utilities Commission of Ohio to strike material from five briefs filed by entities challenging a plan to guarantee sales by FirstEnergy Solutions for certain nuclear and coal plants.

Challengers have called that plan a “bailout” and say it would impose billions of dollars of costs on Ohioans while thwarting competition.

The motions deal with procedures, but they matter, stressed Dick Munson, the Midwest clean energy director for the Environmental Defense Fund. (EDF was not among the parties targeted by the motions.)

“It’s not geek lawyer stuff because we’re talking about a possible cost of $4 billion to the citizens of Ohio,” Munson said. And the case will almost certainly be appealed to the Supreme Court of Ohio after the PUCO rules.

“Regulators and justices deserve to see all the facts and the details. That’s how our democracy works,” Munson continued. But if important material is kept out of the record, “the people who are supposed to make a decision don’t get to make it with the full evidence before them.”

‘As untransparent as possible’

Among other things, FirstEnergy wants to strike any discussion of legislative history and a public record in which the company’s vice-president told Ohio legislators about the importance of competition.

“It seems that FirstEnergy doesn’t want the PUCO to be reminded of FirstEnergy’s past pro-competition position on power plants, in this case where FirstEnergy wants consumers to pay for re-regulation,” said Dan Doron, a spokesperson for the Office of the Ohio Consumers’ Counsel (OCC). “During the 2008 legislation debate, FirstEnergy executives spoke in favor of competition as the best approach for serving Ohioans.”

In any case, the hearing examiner already allowed that material into the case record, noted Kimberly Bojko, who represents the Ohio Manufacturers’ Association in the case.

In other instances, Bojko said, FirstEnergy would let parties say that the hearing examiner wrongly kept certain material out of the record, but would not let them argue why that material matters.

That material includes prior testimony by a PUCO staff witness, relating to a change in the staff’s position from an earlier proceeding, as well as material on whether one of the parties that signed a limited settlement with FirstEnergy had the legal status to do so.

Other brief statements that FirstEnergy wants cut include an observation about the PJM region as the market area for competition.

FirstEnergy declined to comment on its motions.

“Your questions involve legal issues that will be properly addressed as part of the PUCO proceeding,” said FirstEnergy spokesperson Doug Colafella. As a non-attorney, he continued, “I’d prefer to focus on how the plan will impact customers as opposed to legal strategy.”

But challengers see FirstEnergy’s motions as part of a general effort to limit the record for eventual court review.

“The expansiveness of what FirstEnergy is trying is very unusual,” observed Munson. Perhaps FirstEnergy’s lawyers are “trying to be as untransparent as possible because they know they don’t have good arguments,” Munson suggested. “And therefore they want to keep out of the record as many of those strong opposing arguments as there possibly could be.”

Waiting

While FirstEnergy noted that the parties are now awaiting a decision, OCC and others want the PUCO to postpone that ruling until the end of a related case that’s now before the Federal Energy Regulatory Commission. Challengers say that could put ratepayers in a Catch-22 position.

“If the PUCO authorizes the utilities to charge consumers for the power purchase agreements, the utilities can be expected to later assert that there cannot be refunds to consumers in the event FERC rules that the agreements are unlawful,” Doron explained.

Both FirstEnergy and American Electric Power have made such arguments in prior rulemaking cases, and in at least one instance, the Ohio Supreme Court sided with utilities on the issue.

Another case that could affect the outcome was argued before the United States Supreme Court last week. That case challenges state-issued subsidies for power plants in Maryland.

Lower federal courts ruled that the subsidies unlawfully violated FERC authority over wholesale power markets. If the vacancy left by Antonin Scalia’s death remains unfilled, the possibility of a 4-4 decision would let the lower court ruling stand.

 

CORRECTION: This article was updated after it initially ran to clarify Dick Munson’s position with the Environmental Defense Fund.

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