Petition Filed to Reverse Approval of FirstEnergy Bailout in Ohio

Petition finds bailout illegal and costly; comes days after federal regulators require review of same bailout transaction


Shannon Fisk, Earthjustice, (215) 717-4522


Dan Sawmiller, Sierra Club, (419) 733-3145

Earthjustice, representing the Sierra Club, filed a petition with the Ohio Public Utility Commission seeking a rehearing of the Commission’s March 31 approval of a bailout for FirstEnergy Corporation and its shareholders.

The W.H. Sammis coal plant is located along the Ohio River, near the border of West Virginia. The Davis-Besse nuclear plant is located on the shores of Lake Erie.

Under the bailout, utility customers would be forced to subsidize the cost, including a profit, of the W.H. Sammis coal plant, Davis-Besse nuclear plant, by assuming virtually all of the risk that those plants would not be profitable in the wholesale market. The bailout also allows full cost recovery for FirstEnergy’s 4.85 percent share of the Kyger Creek and Clifty Creek coal plants. The filing comes just two days after Federal regulators put a hold on the bailout so that they could evaluate its compliance with federal standards to protect captive utility customers from improper affiliate transactions. 

At the center of the recently filed petition are four key errors deeming the PUC’s decision faulty, misguided, and unlawful: 

  1. Ohio law does not authorize forcing customers to subsidize merchant power plants; yet the bailout placed the financial burden and risk squarely on FirstEnergy customers’ wallets. 
  2. The Commission relied on outdated financial forecasts that had already been proven wrong to conclude that customers would not lose money under the bailout; evidence in the record demonstrates that the bailout would likely cost customers hundreds of millions of dollars or more. 
  3. The bailout would not stabilize customers’ electricity rates but, instead, would deprive customers of the benefits of current low energy prices. 
  4. The Commission credited the bailout with preventing the retirement of the Sammis and Davis-Besse plants, but the evidence shows that FirstEnergy would not retire those plants even without a bailout.

“The Commission should reverse its approval of the illegal FirstEnergy bailout, which puts hundreds of millions of dollars or more of customer money at risk to prop up the profits of shareholders,” said Shannon Fisk, Managing Attorney at Earthjustice. “Ohio customers deserve better than the demonstrably inaccurate and unreliable forecasts and empty fear-mongering about power plant retirements and price volatility that FirstEnergy offered and the Commission relied on to approve this illegal deal.”

“Ohio’s electric utility companies are in a period of transition,” commented Dan Sawmiller, Senior Representative of Sierra Club’s Beyond Coal Campaign.  “Our Public Utilities Commission should not be forcing customers to pay for old coal plants, and instead should be focusing on a responsible transition plan for our state that embraces cleaner sources of energy production and helps us to reduce the amount of energy we waste in our homes and businesses.”

FirstEnergy has until May 12 to submit an opposition to the petition, after which the Commission has thirty days to rule on the petition.  Any party can then seek review of the Commission’s actions by the Ohio Supreme Court. 

Read the petition.

A coal elevator at a coal plant in Ohio.
A coal elevator at a coal plant in Ohio. (Jeremy Stump / CC BY-NC-ND 2.0)

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