Your lights will still stay on, says the Public Utilities Commission of Ohio.

The weekend bankruptcy filing by FirstEnergy Solutions won’t interrupt the power supply to residential and industrial customers of parent company FirstEnergy Corp., the PUCO said.

Meanwhile, since Saturday night’s initial 21-page Chapter 11 filing by FirstEnergy Solutions, hundreds and hundreds of pages of other legal documents from the company and others have been filed with U.S. Bankruptcy Court in Akron.

Some of the documents show how FirstEnergy Solutions said it got into billions of dollars in financial trouble. FirstEnergy Solutions is the unregulated generation arm of FirstEnergy Corp. that owns and operates coal-fired and nuclear power plants; it controls about 10.2 gigawatts of power capacity.

One industry analyst estimates Akron-based FirstEnergy Corp. could pay as much as $2.7 billion to avoid years of litigation in bankruptcy court.

Chapter 11 bankruptcy allows a business to continue operations while working with the federal bankruptcy court and creditors to reorganize. It is not a liquidation of assets.

“The decision by First Energy Solutions Inc. [FES] to reorganize in bankruptcy has been widely expected by the energy industry and Wall Street,” PUCO Chairman Asim Z. Haque said in a statement Sunday.

“There is no reason for customers of FES or anyone else in Ohio to be concerned about whether or not they will have electricity. They will,” Haque said.

Power lines, plants

The PUCO regulates power lines, not power plants, Haque noted in his statement. The PUCO in 2016 allowed FirstEnergy Corp. to charge customers an additional $540 million over three years, with an option to extend the fee two more years, to modernize and make more reliable the electric grid, he said.

Tied into this, FirstEnergy Corp. has previously said it is transitioning to becoming a fully regulated public utility.

FirstEnergy Corp. shares on Monday fell 15 cents, or 0.4 percent, to $33.86 on a day when the U.S. stock market was significantly down.

Charles Fishman, an analyst with Morningstar, said he thinks the utility will seek a settlement similar to a pre-packaged bankruptcy, where creditors agree to a reorganization plan ahead of the actual court filing. The FirstEnergy Solutions bankruptcy was not a surprise and was something he wrote about in a note to investors in early December, he said Monday.

“FirstEnergy wants to avoid a couple years of litigation in bankruptcy court. So do the bondholders,” Fishman said. “They would have to pay something to the bondholders.”

He said his analysis shows the estimated cost to quickly exit from Chapter 11 bankruptcy will be about $2.7 billion in new debt and equity, based on $1.7 billion in unfunded liabilities plus a settlement payment of $1 billion to creditors. Fishman said on Monday he reaffirmed a $40 per share “fair value” target for FirstEnergy stock and said the utility is a solid company.

FirstEnergy Solutions said in its bankruptcy paperwork that it will “pursue a dual-path exit from Chapter 11.”

The path includes working with creditors to reorganize, plus the option of pursuing merger and acquisition efforts for some or all of its assets, FirstEnergy Solutions said.

As of March 31, FirstEnergy Solutions said it had $554.4 million of cash on hand while FirstEnergy Nuclear Operating Company had $6.3 million of cash on hand.

FirstEnergy Corp. is both a secured creditor and an unsecured creditor of FirstEnergy Solutions. FirstEnergy Corp. said it is owed $700 million on one credit facility and approximately $4.4 million in unsecured debt obligations.

Moody’s downgrade

Moody’s Investors Service on Monday downgraded FirstEnergy Solutions debt and said it will withdraw its ratings due to the bankruptcy filing.

A front-page story in the Wall Street Journal on Monday said the bankruptcy filing will force President Donald Trump’s administration to choose between competing energy section factions, pitting coal against natural gas and renewables.

Trump campaigned on helping the beleaguered coal industry. FirstEnergy Solutions said it needs government help to keep its coal and nuclear plants operating or it will begin shutting them down over the next several years.

Fracking cited

How did all of this come to happen? FirstEnergy Solutions tells its story in the bankruptcy documents.

The company said its coal and nuclear plants cannot compete against new natural gas-fueled electrical plants. Hydraulic fracturing, or fracking, of underground shale created a glut of natural gas that is cheaper than coal or nuclear, the company said, and also caused electricity prices to plummet.

The cheap natural gas, plus other renewable fuel sources, also came into use when utilities needed to spend substantial amounts of money to upgrade coal plants to meet more stringent and costly pollution standards, the documents said.

In addition, electricity demand has not recovered from the 2008 Great Recession, adding to the financial pressures on FirstEnergy Solutions, the filings said.

The bankruptcy filing received no sympathy from environmental group Sierra Club, which said FirstEnergy Solutions made bad business decisions for years.

“At a time where the market, and public opinion, consistently pointed towards investing in new clean energy alternatives, FES instead spent billions on old, dirty, antiquated plants,” Neil Waggoner, the Ohio representative for Sierra Club’s Beyond Coal campaign, said in a news release Sunday. “FES’s decision to spend on coal destroyed its business and is a cautionary tale for companies and regulators considering delaying the inevitable transition from coal.”

The Sierra Club said FirstEnergy Solutions in 2010 “made a long-term bet on coal by spending $2 billion to continue to operate the Sammis coal-burning plant in Jefferson County, instead of looking to diversify its portfolio. Soon after, the market for coal power collapsed in the face of competition from cheaper, cleaner alternatives.”

FirstEnergy last week said unless the federal government intervenes, it will close its Davis-Besse and Perry nuclear power plants in Ohio and its Beaver Valley nuclear plant in Pennsylvania in three years.

According to FirstEnergy Solutions bankruptcy documents, the company set aside $1.856 billion as of Dec. 31 to cover the costs of decommissioning the three nuclear plants.

FirstEnergy Solutions said the Nuclear Regulatory Commission estimates it will cost a minimum of $280 million to $612 million to decommission a single nuclear power reactor, depending upon design and other factors. The NRC requires utilities to set aside money to pay for eventual decommissioning.

Reporter Jim Mackinnon covers business and county government. He can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ