Another U.S. Electric Utility May Close Its Nuclear Plants, in Order To Avoid Bankruptcy
Feb. 24, 2017 (EIRNS)—FirstEnergy announced on Feb. 22 that it is getting out of deregulated "market-based" states where it owns power plants and are losing money, and become a fully regulated company. It will sell or close down generating assets, including four nuclear reactors at three sites in Ohio and Pennsylvania. Across the country, utilities with operating nuclear plants have been thrown financially into the red, unable to sell their power at a price they need to even just cover their costs, because they are forced to "compete" with artificially cheap natural gas, and obscenely subsidized "renewables." At risk, are the Davis-Besse and Perry plants in Ohio, and two reactors at Beaver Valley, in Pennsylvania.
FirstEnergy reported a loss of $6.2 billion last year. This loss includes the "write down" of most of its generating assets, FirstEnergy CEO Charles Jones explained in a conference call this week. Incredibly, the nuclear plants, which generate reliable electricity for millions of citizens in the two effected states, are not "worth much" in the world of Wall Street, because the power they produce is not "competitive." FirstEnergy’s subsidiary, which owns the plants, today is worth less than its combined long-term debt, cleveland.com reported.
The day before the utility’s announcement, Cincinnati Republican Rep. William Seitz, said he was drafting legislation to create new regulations in the state’s "zero emissions credits" program which would support the nuclear plants, but apparently FirstEnergy had already decided to get out of the nuclear business. New York and Illinois have had to amend state laws to keep nuclear plants operating in their states, as the price of natural gas and the heavily-subsidized renewables have made power from nuclear plants too expensive to sell on the open market.
Similar to cases where successful holding actions have been put into place, in New York and Illinois, the Ohio state legislature is trying to change the law in order to protect the plants. The day before the FirstEnergy announcement, Ohio Rep. William Seitz (R-Cincinnati) said that he was completing a draft of a bill that would qualify the nuclear plants for "zero emission credits." The utility is not optimistic, however, that such legislative changes could be made in time.