FirstEnergy Corp.’s earnings fell for the second quarter of the year, while operating income was up.
The Akron-based utility said Tuesday that earnings were $134 million, or 28 cents a share, on revenue of $2.7 billion.
That compares with $174 million, or 39 cents a share, on revenue of $2.6 billion for the second quarter last year.
Revenue rose 3.8 percent for the quarter.
But operating income — results excluding special items — were 62 cents a share for the second quarter of 2018, compared with 44 cents a share in the second quarter of 2017.
“Our strong second quarter results exceed the top end of our guidance range,” said Charles E. Jones, FirstEnergy Corp. president and chief executive officer, in a prepared statement.
“This strong performance reflects benefits from weather, as well as the success of our customer-focused regulated growth initiatives,” Jones said.
FirstEnergy said Tuesday it is updating its full-year 2018 earnings forecast range to $3.74 to $4.04 per share.
FirstEnergy also said Tuesday that it has reached an amended settlement agreement in principle with the unsecured creditors’ committee in the Chapter 11 bankruptcy proceedings of FirstEnergy Solutions, a subsidiary of FirstEnergy Corp.
This follows another settlement agreement in principle reached earlier this year involving two groups of key creditors.
Details of the new settlement were to be posted to the company’s investor information site, http://www.firstenergycorp.com/ir, on Wednesday morning and discussed during the Wednesday webcast with financial analysts.
FirstEnergy Solutions is the unregulated generation arm of FirstEnergy Corp. and filed for Chapter 11 bankruptcy on March 31.
The bankruptcy filing is part of FirstEnergy’s plans to become a fully regulated electric utility.
FirstEnergy Solutions operates two nuclear power plants in Ohio and one in Pennsylvania, as well as coal-fired power plants. FirstEnergy Solutions cited costly environmental requirements, weak electricity demand and strong competition from cheap, fracked natural gas and renewable energy sources as reasons for the bankruptcy filing.
FirstEnergy Corp. and its distribution, transmission, regulated generation and Allegheny Energy Supply subsidiaries are not part of the filing.
In June, total FirstEnergy employment at its downtown Akron office tower was about 1,000 and 550 at the White Pond site in West Akron. It’s unclear how many of these employees accepted buyouts that were offered earlier this year. Some 200 Akron area employees were eligible for the early retirement incentives.
FirstEnergy Corp.’s most senior female executive and two other top vice presidents will be taking early retirement next year.
The Akron electric utility on Tuesday said Leila Vespoli, executive vice president of corporate strategy, regulatory affairs and chief legal officer, will retire effective April 1.
Also taking early retirement are James Pearson, executive vice president of finance, and Charles Lasky, senior vice president of human resources. Pearson will retire no later than April 1 and Lasky will retire July 1.
The three accepted FirstEnergy’s executive early retirement pogram, the utility said. The company in late June also offered buyouts to about 600 nonunion support staff employees, including approximately 100 people who work in Akron.
“The contributions made by Leila, Jim and Charlie during their long careers with the company have been significant, particularly with mergers, acquisitions and growth,” Charles E. Jones, president and chief executive officer, said in a news release. “Their strategic and thoughtful leadership has been greatly appreciated as the company and industry faced unprecedented changes over the last decade. On behalf of the entire organization, I thank them for all they have done to make FirstEnergy a top industry performer, rewarding place to work and solid investment for our shareholders.”
Vespoli was initially hired in 1984 as an associate attorney with Ohio Edison. She was promoted to her current position in 2016.
She has a bachelor’s degree in business economics from Miami University and a law degree Case Western Reserve University School of Law. She completed the Massachusetts Institute of Technology Reactor Technology Course for Utility Executives and attended the Northwestern University Kellogg School of Management’s Director Development Program.
She is on the boards of Playhouse Square and the University of Akron Foundation and chairs the FirstEnergy Foundation. She previously served on other boards.
Pearson joined FirstEnergy subsidiary Penn Power in 1976 as a member of the accounting department. He was promoted to his current position this year.
He has a bachelor’s degree in accounting from Westminster College in New Wilmington, Pa., and completed the MIT Reactor Technology Course for Utility Executives and the Harvard Business School’s executive education program Driving Corporate Performance. He is on the Greater Akron Musical Association board of trustees.
Lasky began his career with the company in 1986 as an engineer at the W.H. Sammis Plant in Stratton, Ohio. He was promoted to his current position this year.
He has a bachelor’s degree in mechanical engineering from the University of Akron and is a graduate of the University of Michigan Business School Executive Program, University of Michigan Chief Human Resource Officer program and the MIT Reactor Technology Course for Utility Executives. He is a trustee for the Ohio Foundation of Independent Colleges.
SAN JUAN, Puerto Rico: Ten months after Hurricane Maria destroyed Puerto Rico’s electric grid, the local agency responsible for rebuilding it is in chaos and more than $1 billion in federal funds meant to strengthen the rickety system has gone unspent, according to contractors and U.S. officials who are anxious to make progress before the next hurricane.
The Puerto Rico Electric Power Authority has seen two chief executive officers and four board members resign in less than a week in a messy fight over how much the bankrupt agency should pay its CEO. The agency’s fourth CEO since the hurricane lasted less than 24 hours on the job last week before resigning amid public outrage over his $750,000 salary.
Gov. Ricardo Rossello on Wednesday named the former head of Puerto Rico’s water and sewer agency as the fifth head of the electric company since Maria, at a salary of $250,000 a year. Jose Ortiz starts work Monday.
“In spite of missteps in the past, everybody will see that we have the right person at the right time,” Rossello said.
The turmoil has fueled delays in launching $1.4 billion worth of work that includes replacing creaky wooden power poles vulnerable to collapse in the next storm, the chief federal official in charge of rebuilding Puerto Rico told The Associated Press.
“There is no permanent work that’s been done,” said Mike Byrne, the Federal Emergency Management Agency’s assistant administrator for field operations. “What I’m worried about is the next level, the permanent work, the going in and building the grid the way I’ve been tasked to do by Congress.”
From shut-down medical equipment to the spread of waterborne diseases, the cascading effects of power grid failure likely led to hundreds of deaths in the aftermath of the Category 4 hurricane, although the exact number remains a subject of debate and ongoing investigation.
“The one reason why so many people died in the aftermath of the hurricane was the lack of energy,” said opposition Sen. Eduardo Bhatia. “And the lack of energy comes from how fragile the system was because of years of neglect.”
Several hundred Puerto Ricans remained without power Thursday in the longest-running blackout in U.S. history. The entire island remains vulnerable because much of the massive damage from the storm was resolved with temporary fixes likely to fail in the next hurricane.
These include thousands of weakened and damaged poles and power lines that were reused in the absence of new supplies. In some cases, lines were bolted to trees.
The Puerto Rico power authority notified three large mainland U.S. companies in March that they had been selected to carry out $1.4 billion worth of contracts that includes finishing emergency restoration work and beginning the long-term task of overhauling the power grid. Nearly four months later, the agency has not issued the final orders required to send the linemen into the field to do the permanent work, according to federal officials and some contractors.
The power authority has not explained why, and a spokesman did not return repeated AP calls for comment.
As with virtually all post-hurricane disaster relief in Puerto Rico, the work is contracted and paid for by bankrupt local agencies using money disbursed by FEMA from billions appropriated by Congress.
The board created by Congress to oversee Puerto Rico’s finances and bankruptcy-like proceedings reviews the government’s major contracts. In May, it found problems with the contracts of two of the power companies chosen to do the first stages of permanent work. These include vague descriptions of the scope of the project and a lack of detailed evaluation of costs.
Ortiz, the power authority’s new head, indicated potential problems with at least one of the contractors, Cobra, a subsidiary of Oklahoma-based Mammoth Energy. Cobra has been awarded more than $1.8 billion in federal money, at rates of about $4,000 per worker per day in many cases. Ortiz said the cost of the contractors would be getting a second look.
“It will be reevaluated,” he told reporters Wednesday. “Certainly the numbers merit being looked at very closely.”
Cobra representatives declined to comment.
The problems at the power authority are prompting calls for urgent change to Puerto Rico’s decades-old system of putting its power generation and transmission under the control of a government agency run by the governor’s appointees rather than an independent, government-regulated corporation, as occurs in virtually all other parts of the United States.
Rossello has proposed privatizing the generation of energy and awarding concessions to private contractors for power transmission and distribution. Puerto Rico legislators have approved a measure that would allow for those changes, and they expect to approve another bill in coming months to establish a regulatory framework.
For many on and off the island, that isn’t fast enough.
“PREPA needs to be depoliticized in order to be a functional, modern and reliable utility. The people of Puerto Rico deserve at least that much,” said Utah Republican Congressman Rob Bishop, who oversees Puerto Rico issues as chairman of the House Committee on Natural Resources. The committee will hold a July 25 hearing on the power company’s future.
Agency employees say that for decades, near-total control by the governor’s office has led to the power authority being stuffed with unqualified, politically connected managers. Political influence also drove a string of unrealistic, expensive projects that were cancelled by subsequent administrations.
The electric company was also used as a piggybank for the commonwealth’s government by providing years of power to government agencies that didn’t pay their bills, and highly discounted rates to important island businesses like major hotels.
Essential maintenance like trimming trees back from power lines and replacing decrepit poles was delayed for years, even decades.
In May 2017, Puerto Rico filed for the biggest municipal bankruptcy ever in the U.S. The government carries a $70 billion public debt load, which includes more than $9 billion held by Puerto Rico’s power company.
Bankrupt and debilitated by mismanagement, the Puerto Rican electric grid was already in a state of near-collapse when Maria devastated the island in September and left millions without power.
That has been followed by a cascade of CEO departures at the power authority.
First to go was Ricardo Ramos, amid allegations that he hired an underqualified power contractor, Whitefish. His temporary successor was replaced by Walter Higgins, a veteran power executive.
But on July 11, just four months into the job, Higgins resigned. Among the factors influencing his decision, he said, was that compensation details stipulated in his contract could not be met. A month earlier, Puerto Rico’s justice secretary had said it would be illegal for a public employee like Higgins to receive bonuses on top of his $450,000 salary.
Power company officials then named board member Rafael Diaz as the new CEO, with a $750,000-a-year salary. Diaz lasted only a day, resigning along with four other board members after Gov. Rossello criticized his salary and said those unwilling to adjust their compensation expectations amid an 11-year recession should step down.
The rapid turnover has set off alarm among ordinary Puerto Ricans and criticism from Rossello’s political opponents.
“The economy is being affected, the quality of life is being affected and the lives of people who depend on the electrical system are being put at risk,” said Rolando Ortiz, who oversees an association of mayors from the opposition Popular Democratic Party.
Byrne, the FEMA administrator, said stability was urgently needed at the power authority in order to protect Puerto Rico from future disasters.
“This is a whole machine of activity that needs to take place,” Byrne said. “It needs a director, it needs leadership it needs capability.”
“The sooner we get moving, the better for all involved,” he said.
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Bankrupt FirstEnergy Solutions plans to sell $140 million of retail and wholesale contracts to Exelon Generation Co.
The deal, initially agreed upon Monday, is part of FirstEnergy Solution’s Chapter 11 bankruptcy proceedings in U.S. Bankruptcy Court and is subject to court approval.
According to a federal regulatory filing from Exelon, FirstEnergy Solutions will assign all of its retail electricity and wholesale load serving contracts and other related commodity contracts to Exelon Generation for a $140 million cash purchase price.
The process calls for the assets to be put up for a proposed auction on Sept. 6, according to a court filing.
The deal is expected to close by the end of the year, according to Exelon’s filing with the Securities and Exchange Commission. The deal can be terminated by either party if it is not consummated by Dec. 31.
Exelon was the winner out of 19 businesses looking to buy the electricity contracts, according to bankruptcy court documents. Exelon Generation was one of two finalists and, under bankruptcy code language, is known as the stalking horse purchaser.
FirstEnergy Solutions is the unregulated generation arm of Akron-based FirstEnergy Corp. and filed for Chapter 11 bankruptcy on March 31.
The bankruptcy filing is part of FirstEnergy’s plans to become a fully regulated electric utility. FirstEnergy and its distribution, transmission, regulated generation and Allegheny Energy Supply subsidiaries are not part of the filing.
The city of Cuyahoga Falls has filed a lawsuit claiming it was hornswoggled by a contractor that promised to save it more than $23 million by installing 40,000 automated meters to measure water and electric usage at peoples’ homes and businesses.
That savings never materialized. Thousands of the meters have broken over the past decade and a system advertised as being turnkey ended up being a lot of work, according to the suit filed against Johnson Controls and Badger Meter.
Now the city wants the contractor and subcontractor to pay it more than $16 million for the trouble, accusing the businesses of breech of contract, fraudulent inducement and negligent misrepresentation.
It’s not yet clear where the court battle will be fought. The city originally filed its suit in Summit County Common Pleas Court on April 12. But on Wednesday, Johnson Controls filed paperwork in U.S. District Court seeking to have the case moved to federal court.
Lawyers for the contractors have not responded to the allegations in the complaint. But a Cleveland lawyer representing Badger on Thursday filed paperwork asking a judge to dismiss the case, arguing that the city waited too long to sue.
A representative for Johnson Controls declined to comment about the case.
Cuyahoga Falls officials this week said the 23-page lawsuit explains a slow-motion debacle that led them to court.
They added that no city resident or business had been overcharged because of the meter issues.
When one of the automated electric meters breaks, it merely stops recording, city Law Director Russell W. Balthis said.
Water meters are different. When they break, they slow the recording of water used. So, if anything, consumers may have used more water than they were billed for, he said.
The meter trouble apparently stretches back more than a decade and across different city administrations. According to the lawsuit, it unfolded like this:
Some time around 2007, the city sought bids from contractors to identify energy conservation measures that would pay for themselves and financially benefit the city.
Officials picked Johnson Control based on its experience and a guarantee that the company would pay the difference in cash at the end of each calendar year if the estimated savings weren’t achieved, the lawsuit said.
Johnson Controls started by studying the city’s property, operations and systems, including the testing of 250 water and electric meters for accuracy.
It concluded that installing new, automated meters that wouldn’t require a meter reader walking door to door could save Cuyahoga Falls more than $23 million over the coming decade, the suit said. The price tag was a little more than $17 million and required a 10-year contract.
In July 2008, City Council began debating the idea. Johnson Controls employees tried to soothe some concerns by saying the company was involved in 50 similar projects that, combined, guaranteed other cities $4 billion in energy savings, the suit said.
There were shortfalls in projected savings to those cities, the Johnson Controls employees conceded, but said they were minimal — only about 0.05 percent of $4 billion, or about $250,000, the suit said.
Officials ultimately approved the contract and Johnson Controls began replacing old meters with automated ones in 2008.
The lawsuit alleges there were issues from the start: Poor installation of meters, problems with subcontractors canceling appointments to replace meters and project delays caused in part by the supply of meters.
City officials began to doubt the project’s success and feared there had been a bait-and-switch with the water meters.
Cuyahoga Falls wanted to maintain the type of meters it had throughout the city, the Badger M-25. But Johnson Controls “insisted” on using the Badger LP model, the suit said.
“The M-25 meters are larger, sturdier, have a protective screen, use stainless steel instead of polymer at stress points,” the suit said.
In spring of 2009, a Badger account representative met with the city and said the M-25 meter was being taken off the market and would be replaced by the LP, the lawsuit said.
The city went ahead with the LP, not knowing at the time that the M-25 meters — which the city asserts are more expensive than the LPs — were not going off the market.
By December 2010, the city had already paid Johnson Controls more than $17 million and wasn’t getting what it wanted, the lawsuit said.
In January 2014, a new administration took over Cuyahoga Falls and learned that Johnson Controls failed to provide the city with annual reports of cost savings generated by the new meters, the suit said.
Cuyahoga Falls received a first-year report in 2010 or 2011 — two or three years after the first meters were changed. It said the city was getting expected savings, the suit said.
In May 2014, apparently after the new administration followed up with Johnson Controls, the city received the next four years of cost-savings reports that revealed a shortfall of more than $784,000 during those four years, the suit said.
Iron and calcium from city water built up in the meter’s chambers and caused the water meters to fail, Johnson Controls said, according to the suit.
“The city was surprised by [Johnson Controls’] allegations as the city maintains the highest water quality and is in compliance with all state and federal water quality rules, regulations and standards,” the lawsuit said.
Moreover, the city said, Johnson Controls had “unfettered access” to the city’s water reports and never suggested “water hardness” could impact the new meters, the lawsuit said.
Meanwhile, there were problems with the new automated electric meters, too, the suit said.
The system was supposed to be wireless and two-way, so city workers could not only remotely read the meters, but turn them on and off, the suit said.
But that never worked in commercial buildings, the suit said, and premature battery failures in other residential and commercial units also caused many meters to stop recording any usage at all.
Of about 25,000 automated electric meters, 4,000 to 5,000 meters are not working and more continue to fail every month, the suit said.
The city, which expected to save money with the high-tech meters, has instead had to hire three part-time meter readers and a full-time manager to oversee them, the suit said.
Worse, the city lawsuit said, the system is “rapidly becoming obsolete with no known solution to fix the existing problems.”
Amanda Garrett can be reached at 330-996-3725 or [email protected].
Chuck Jones, the head of FirstEnergy Corp., got right to the point in his speech Tuesday at the Akron utility’s annual shareholders meeting.
“It’s safe to say the last week of March was one of the most eventful in our company’s history,” the chief executive officer said.
About 120 people attended what turned out to be a short meeting in the John S. Knight Center in downtown Akron. The event started at 8 a.m., with official business concluding at 8:09 and the entire program over by 8:33.
Jones addressed shareholders after the business portion of the meeting officially ended, noting FirstEnergy Solutions and its subsidiaries, plus FirstEnergy Nuclear Operating Company, filed for Chapter 11 bankruptcy that month. Just before the filing, Jones said, FirstEnergy Solutions notified regulators it planned to close its three nuclear power plants, Davis-Besse and Perry in Ohio and Beaver Valley in Pennsylvania, while asking the federal government to intervene to support the plants.
While the bankruptcy process continues to play out in the courts, FirstEnergy has reached a pending agreement with major creditors that “is a significant step toward these companies ultimately emerging from bankruptcy,” Jones said. FirstEnergy, meanwhile, also received a $2.5 billion equity investment that reduced debt and shored up pensions, he said.
As FirstEnergy continues with its plan to become a fully regulated utility again, Jones said the company will spend $10 billion over the next three years to upgrade and improve critical infrastructure including transmission and distribution lines and incorporating “smart grid” technology.
“Through our multibillion dollar Energizing the Future initiative, we’re keeping pace with customer demand for electricity by upgrading and modernizing our transmission system,” Jones said. “We plan to invest up to $4.8 billion from 2018 through 2021 on these improvements.”
FirstEnergy has identified another $20 billion in projects to pursue beyond 2021, Jones said.
FirstEnergy will be implementing automated technologies that can do such things as quickly ward off outages and re-route electricity to customers to prevent a widespread outage, Jones said.
“We’re also taking a hard look at FirstEnergy’s structure and staffing levels to better align them with our company’s needs going forward,” Jones said. A new team will be looking at corporate support services and how they fit into a fully regulated utility, he said.
(FirstEnergy in January 2017 started a review of primarily the corporate and shared services side of the business — in a process called FE Tomorrow — to see if costs are aligned with the utility’s planned exit from competitive generation. The process could go into 2019.)
The utility also has created a council charged with building a workforce that more accurately reflects the demographics of the communities it operates in, Jones said.
Diversity training is required of all employees, and the 2018 incentive compensation targets for top leaders includes a diversity and inclusion goal, Jones said.
Just three of six board-supported items passed: the election of 12 directors to one-year board terms, the appointment of PricewaterhouseCoopers as FirstEnergy’s public accounting firm and an advisory measure on named executive compensation.
Shareholders failed to pass an amendment to replace a supermajority voting requirement with a majority voting requirement to amend articles of incorporation and regulation; a measure to implement majority voting for uncontested director elections; and a proposal to implement proxy access in the amended code of regulations.
Also failing was a measure to allow holders of 10 percent in FirstEnergy stock to call a special shareholders meeting. FirstEnergy’s current threshold is 25 percent stock ownership.
Tuesday’s meeting also marked the retirement of George Smart after 14 years as FirstEnergy board chairman. FirstEnergy’s new board chairman is Don Misheff, 61, retired managing partner of the Northeast Ohio offices of Ernst & Young public accounting firm. Misheff first joined the FirstEnergy board in 2012.
Reporter Jim Mackinnon covers business and county government. He can be reached at 330-996-3544 or [email protected]. Follow him @JimMackinnonABJ on Twitter or http://www.facebook.com/JimMackinnonABJ.
FirstEnergy Corp. Monday announced what it’s calling a significant step toward its subsidiary, FirstEnergy Solutions, emerging from its bankruptcy filing.
The Akron-based utility said it had reached an agreement in principle with two groups of key creditors in the Chapter 11 bankruptcy proceedings of FirstEnergy Solutions (FES), its related entities and FirstEnergy Nuclear Operating Co. The agreement is a proposed settlement of all potential claims among the groups.
“Collectively, the creditors in this agreement represent a majority of the outstanding unsecured and secured debt obligations of FES and its related entities, including the majority of Bruce Mansfield certificate holders,” the company said in a statement.
In an earnings conference call with analysts, FirstEnergy President and Chief Executive Officer Charles E. Jones said, “This agreement is a significant step toward FES ultimately emerging from bankruptcy and would settle a key issue in the FES bankruptcy, so that the creditors may focus their efforts on a restructuring plan.”
FirstEnergy Solutions filed for bankruptcy protection in Akron on March 31, which allows it to continue operating while undergoing a court-supervised reorganization.
The FirstEnergy subsidiary operates two nuclear power plants in Ohio and one in Pennsylvania, as well as coal-fired power plants.
FirstEnergy and its distribution, transmission, regulated generation and Allegheny Energy Supply (AE Supply) subsidiaries were not part of the filing.
The bankruptcy filing was hinted as coming as far back as November 2016, when parent FirstEnergy Corp. said it planned to become a fully regulated utility and was looking to sell off power plants and debt-laden FirstEnergy Solutions.
In a prepared statement, the company said “the settlement is intended to fully release FirstEnergy and related parties from all claims. It provides FES, its subsidiaries, and FENOC with assistance from FirstEnergy on key business matters during the restructuring process.
The agreement also affirms FirstEnergy’s previously announced guarantees and assurances of certain FES employee-related obligations, which include unfunded pension obligations and other employee benefits, and provides for the waiver of certain inter-company claims held by FirstEnergy.
The agreement is subject to approval by several boards of directors of those involved, as well as the approval of the bankruptcy court.
The creditor groups also agreed to try to get other key remaining creditors to join the settlement by June 15.
In other news, FirstEnergy Corp.’s profit swelled for the first quarter of the year, reflecting the company’s bankruptcy filing last month and its first time it reported earnings without its FirstEnergy Solutions subsidiary.
FirstEnergy on Monday reported first-quarter earnings of $1.2 billion, or $2.55 per share, on revenue of $3 billion. That compares to earnings of $205 million, or 46 cents per share on $2.9 billion revenue from the same period last year.
“Eighteen months ago, we announced our plan to move away from commodity-exposed generation, so our company could fully focus on the tremendous opportunities in our regulated businesses,” Jones said. “Today, we are pleased to report strong earnings that represent FirstEnergy as a fully regulated company, and to reaffirm our guidance and growth projections.”
Ralph J. DiNicola was a fierce advocate for FirstEnergy Corp.
DiNicola worked as the Akron electric utility’s main spokesperson during its formative years and turbulent times that included a major U.S. and Canada blackout in 2003, the 2002 Davis-Besse nuclear power plant crisis, and highs and lows that included mergers, legal and financial disputes, and industry changes.
DiNicola, who retired in 2009 as the utility’s vice president of communications, died April 10 from cancer. He was 68.
“He was a master communicator,” said Tony Alexander, who retired in 2015 as executive chairman and chief executive officer of FirstEnergy. “He was someone I relied on a long time in my career, before I became CEO. … He was a close personal friend for 30 years.”
DiNicola knew the company, the industry, customers, and media and had a special talent in being able to work with all of those different constituencies, Alexander said. DiNicola also had a great sense of humor and a gift that allowed him to make all kinds of scenarios manageable, he said.
“The story of Ralph isn’t complete until you understand how much he loved his family,” Alexander said. “They always came first to him.”
Michael Douglas, the Beacon Journal’s editorial page editor, wrote a column, headlined “My 25 years with Ralph, the professional voice of FirstEnergy,” just prior to DiNicola’s retirement.
“What has been striking about DiNicola is his passion for the company, and the way that has translated into his encyclopedic knowledge of the power industry …” Douglas wrote. “DiNicola has impressed with his knack for the narrative, putting his command of the details to a higher use, that English degree from Notre Dame (via Hoban and a Roadway scholarship) yielding an impressive return.”
DiNicola frequently had the advantage in conversations and was not subtle, Douglas wrote.
“In this climate of so much spin, there has been something refreshing about the DiNicola way, aggressive, straightforward, no attempt to veil what he was doing,” Douglas said.
DiNicola was born in Akron on Oct. 11, 1949. He attended Archbishop Hoban High School and graduated from the University of Notre Dame with a degree in English.
He liked combing beaches for shark teeth, golfing, boating on the Portage Lakes and spending time with family and friends. Early into his retirement, he purchased a Corvette sports car.
DiNicola started his career at the former Roadway Express before going to what became FirstEnergy Corp.
He was the son of the late Ralph and Antonette DiNicola. He is survived by his wife, Pamela; children Nick, John, and Laura; brothers Mike and Tom; three grandchildren; and nieces and nephews. Two brothers, Joe and Guy, preceded him in death.
Calling hours will be 2 to 5 p.m. Sunday at Anthony and Son Funeral Home, 4178 Massillon Road, Green.
A Mass of Christian Burial will be celebrated 10 a.m. Monday at Queen of Heaven Catholic Church, 1800 Steese Road, Green, followed by burial at Holy Cross Cemetery.
The family asks that donations be made to the American Heart Association.
Babcock & Wilcox Enterprises Inc. has amended its stock rights offering, announced its chief financial officer is retiring and changed its earnings guidance for the year.
B&W, based in Charlotte, N.C., and with significant operations with more than 700 employees in Barberton and Copley, said it is increasing the size of a previously announced stock rights offering to $248 million and lowering the per-share price from $3 to $2. The expiration date was extended to April 30 from April 10.
B&W said Vintage Capital Management LLC has agreed to increase its backstop of the rights to $245 million.
B&W makes and services coal-fired boilers and pollution control equipment for power plants and is involved in related industries. It has been struggling to compete in part because of the growth in natural gas power plants.
B&W CFO Jenny L. Apker said she will retire on June 1 for health-related reasons and will continue to work in a non-executive role with the company through Aug. 31.
Joel K. Mostrom, a senior director of Alvarez & Marsal North America LLC, will become interim CFO on June 1. B&W said it expects to search for a permanent CFO later in the year.
B&W on March 21 appointed Robert M. Caruso, a managing director of Alvarez & Marsal North America LLC, to serve as chief implementation officer. Caruso reports directly to B&W’s board of directors and will work in tandem with B&W Chief Executive Officer Leslie C. Kass.
Caruso’s duties include assisting management in reviewing strategic options, developing the five-year business plan, identifying opportunities for cost savings initiatives, evaluating cash flow forecast, and analyzing uses of working capital, the company said in a news release.
B&W said it now expects to spend $51 million more than previously estimated to complete troubled renewable energy projects in Europe. The company said it hopes to recoup at least some of the costs through insurance and relief from customers.
The company continues to look into divestitures and other options for what it calls non-core assets.
The FirstEnergy Solutions Corp. court case, involving some 14,000 creditors, billions of dollars in debt, a small army of lawyers, plus putting at stake the future of nuclear and coal power plants, could take years to resolve, says a local bankruptcy lawyer.
Meanwhile, efforts have started to look into how consumers may be impacted as the unregulated generation arm of Akron electric utility FirstEnergy Corp. goes through the early stages of the Chapter 11 bankruptcy process.
FirstEnergy Solutions filed for bankruptcy protection in Akron on March 31, which allows it to continue operating while undergoing a court-supervised reorganization. The FirstEnergy subsidiary operates two nuclear power plants in Ohio and one in Pennsylvania, as well as coal-fired power plants.
The bankruptcy filing was hinted as coming as far back as November 2016, when parent FirstEnergy Corp. said it planned to become a fully regulated utility and was looking to sell off power plants and debt-laden FirstEnergy Solutions.
There probably won’t be a quick resolution to the complex case, said one legal onlooker.
“It can take, on the short end, five or six years [to resolve]. I would think it can take longer than that,” said Joseph Ferrise, staff attorney for the downtown Akron office of the Chapter 13 trustee, who oversees local individual bankruptcy cases. Ferrise also teaches law classes, including on bankruptcy, at the University of Akron.
With the initial April 3 court hearing behind it, FirstEnergy Solutions now will have about 18 months to file two critical bankruptcy documents, Ferrise said.
The first document will be a disclosure statement that lists assets, liabilities and more, much of it redundant information from other filings, he said. Creditors need the document to make informed business decisions.
The other critical document will be FirstEnergy Solutions’ plan of reorganization, he said. It will show, among other things, how much FirstEnergy Solutions intends to pay creditors — and creditors likely will contest at least some of what the plan proposes, Ferrise said.
While one industry analyst last week said parent FirstEnergy Corp. could decide to pay as much as $2.7 billion to try to quickly resolve the bankruptcy, Ferrise indicated he did not think that was likely — and added if FirstEnergy decided that was its best option, the process could still take years.
The bankruptcy will rack up significant legal expenses, he said. Some of the numerous lawyers involved make as much as $700 to $900 an hour, he said.
The end result of the Chapter 11 process will ultimately be a stronger FirstEnergy that is positioned for decades of good financial health and performance, Ferrise said.
“I’m a homer. I hope this goes well,” he said. “I think that’s a viable and reasonable thing to expect.”
U.S. Bankruptcy Judge Alan M. Koschik, who is overseeing the case, is well qualified for the task, Ferrise said. Koschik’s background includes previous work as a Chapter 11 bankruptcy attorney.
“He is in his element. He’s going to have a real good feel for this case,” Ferrise said.
Customers must wait
Residential and business electricity customers of FirstEnergy may also have to wait a while to see how the Chapter 11 bankruptcy could impact their pocketbooks.
The Public Utilities Commission of Ohio last week opened a case on its docket seeking to protect Ohio consumers from any adverse impact from the FirstEnergy Solutions bankruptcy filing.
The PUCO has said the bankruptcy will not cause anyone to go without electricity because of measures in place to ensure the continued delivery of power. Ohio law requires local utilities to step in and supply electricity in case a supplier is unable to fulfill its contractual responsibilities.
In its April 4 filing, the PUCO said it cannot guarantee that contracts entered into by FirstEnergy Solutions prior to the bankruptcy filing will not be impacted.
The PUCO filing directs FirstEnergy Solutions to file a report by May 4 saying, among other things, whether it will be able to continue to serve existing retail customers including government aggregations, and to disclose any other material changes.
The Ohio Consumers’ Counsel office said it will file comments for consumer protection in the PUCO case.
“FirstEnergy Solutions has proposed in its bankruptcy filing to continue to honor the contracts it has with its customers,” the OCC said Friday. “The FirstEnergy utilities known as Cleveland Electric Illuminating, Ohio Edison and Toledo Edison are not part of the bankruptcy and their rates are unaffected.”
A FirstEnergy Solutions spokeswoman in early March said bankruptcies largely involve creditors and have little impact on residential customers.
FirstEnergy Solutions cited costly environmental requirements, weak electricity demand and strong competition from cheap, fracked natural gas and renewable energy sources as reasons for needing to reorganize under Chapter 11. The company has 3,076 employees, most of whom work at the power plants, with 118 employees in Akron.
Days prior to the bankruptcy filing, FirstEnergy Solutions told the federal government it intends to shut down and decommission its three nuclear plants, at an estimated cost of more than $1.8 billion, by 2021. It asked President Donald Trump’s administration to intervene to keep the plants running.
While in West Virginia on Thursday, Trump said his administration will look into using emergency powers to keep coal and nuclear plants open. He did not name FirstEnergy in the off-the-cuff comments, which came a day after a private dinner meeting with a FirstEnergy lobbyist.
The next regularly scheduled hearing for FirstEnergy Solutions in U.S. Bankruptcy Court in Akron is 9 a.m. April 26.
Without naming FirstEnergy Corp., President Donald Trump said that his administration will look into using emergency powers to keep coal and nuclear power plants open, according to news reports.
Trump was in West Virginia and made off-the-cuff comments Thursday about looking into saving some coal and nuclear electric plants in an apparent reference to FirstEnergy, according to stories by the Washington Examiner, Bloomberg News and others.
Trump attended a private dinner Wednesday hosted by Jeff Miller, the FirstEnergy lobbyist who had been the manager for U.S. Energy Secretary Rick Perry’s 2016 presidential campaign, according to news reports.
The president’s comments also came days after FirstEnergy Solutions, the unregulated generation arm of Akron-based FirstEnergy Corp., filed for bankruptcy on March 31 after making plans to shutter its nuclear power plants in Ohio and Pennsylvania.
FirstEnergy Solutions has asked the federal government to intervene to keep its coal and nuclear power plants operating.
Trump on Thursday referred to Section 202 of the Federal Power Act as a means to keep some power plants open in response to questions during a roundtable event on tax reform. The act gives the energy secretary the power to keep power plants open if that is in the national interest.
A FirstEnergy Solutions spokesman said the company had no comment on Trump’s comments.
FirstEnergy Solutions intends to keep operating its coal and nuclear power plants as it reorganizes under Chapter 11 bankruptcy proceedings.
The legal team representing the unregulated generation arm of parent FirstEnergy Corp. made its first formal appearance before a packed courtroom Tuesday morning in U.S. Bankruptcy Court in downtown Akron.
In the team’s opening comments, Judge Alan M. Koschik was told that debt-laden FirstEnergy Solutions Corp. should have sufficient funding to keep operating and pay employees during what could be months-long legal proceedings.
One thing that FirstEnergy Solutions will generate is an abundance of billable hours by attorneys.
So many onlookers — largely lawyers — showed up for the 9 a.m. hearing that an unused courtroom in the Seiberling Federal Building was opened so that the more than 25 people unable to get a seat in the main room could watch the proceedings over a large television monitor. As many as 75 others listened in over a telephone conference line.
FirstEnergy Solutions filed for Chapter 11 bankruptcy on Saturday night, meaning it intends to reorganize, not liquidate. The bankruptcy filing came just before a large bond payment came due April 2. The filing was long anticipated — parent company FirstEnergy Corp. announced in November 2016 it intended to become a fully regulated electric utility and that as part of that process subsidiary FirstEnergy Solutions could file for bankruptcy.
FirstEnergy Solutions said it is hobbled by billions of dollars in debt, costly environmental requirements, weak electricity demand and strong competition from cheap, fracked natural gas and renewable energy sources.
Scott Alberino, lawyer with Washington, D.C., law firm Akin Gump Strauss Hauer & Field, and representing FirstEnergy Solutions, told Koschik that the company also needed to know in the near future if its three nuclear power plants, Davis-Besse and Perry in Ohio, and two-reactor Beaver Valley in Pennsylvania, will be able to keep on running.
FirstEnergy Solutions last week told the federal government it intends to shut down and decommission the nuclear plants, at an estimated cost of more than $1.8 billion, by 2021. It has asked President Donald Trump’s administration to intervene to keep the plants running but as of Tuesday had no response.
“We would like nothing more than to rescind the deactivation notices,” Alberino said.
Besides the three nuclear plants, FirstEnergy Solutions also operates coal-fired power plants, including Mansfield in Pennsylvania and Sammis in Ohio.
FirstEnergy Solutions said it has 3,076 employees, most of whom work at the power plants. It has 118 employees in Akron, with corporate offices at its White Pond Drive campus.
Koschik granted on an interim basis all of the motions presented Tuesday that are intended to keep FirstEnergy Solutions a going concern as part of the Chapter 11 process.
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 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.
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.
FirstEnergy Solutions filed for Chapter 11 bankruptcy Saturday evening.
The unregulated power generation arm of Akron’s FirstEnergy Corp. said in a 21-page document that it had more than $1 billion in liabilities and that reorganizing under the bankruptcy code was in the best interests of the company and creditors.
FirstEnergy Solutions was due to make a significant debt payment on Monday but did not have the funds on hand to make the payment.
The filing for bankruptcy protection includes FirstEnergy Solutions, along with all FES subsidiaries and FirstEnergy Nuclear Operating Co., according to a prepared statement released by FirstEnergy late Saturday night. The filing doesn’t involve FirstEnergy or its distribution, transmission, regulated generation and Allegheny Energy Supply subsidiaries.
“FirstEnergy and its other subsidiaries are not part of this Chapter 11 filing,” FirstEnergy President and CEO Charles E. Jones said in the prepared statement. “The six million customers of our regulated utilities will continue to receive the same reliable service, while our regulated generation facilities will continue normal operations, with the same longstanding commitment to safety and the environment.”
FirstEnergy had warned about the possibility since November 2016, with Jones telling analysts during a conference call that “competitive generation is weighing down the rest of the company” and noting that the odds were already stacking up against FES being able to service its debt on time.
FirstEnergy is continuing its previously announced strategy to exit the competitive generation business and become a fully regulated utility company.
Last week, the company confirmed it will move ahead with plans to retire four nuclear power plants for which it has been unable to attract a buyer.
“FirstEnergy will remain focused on creating long-term value for its customers, employees and shareholders,” Jones said. “Becoming a fully regulated utility company should give FirstEnergy a stronger balance sheet, solid cash flow and more predictable earnings. Simply put, we will be better positioned to deliver on the tremendous opportunities for customer-focused growth.”
FirstEnergy Solutions is owned entirely by FirstEnergy Corp.
FirstEnergy Solutions in turn owns FE Aircraft Leasing Corp., FirstEnergy Generation, FirstEnergy Generation Mansfield Unit 1 Corp., FirstEnergy Nuclear Generation LLC, FirstEnergy Nuclear Operating Company and Norton Energy Storage LLC.
The filing lists numerous creditors and shows FirstEnergy Solutions owes $769.2 million to Wilmington Savings Fund Society and hundreds of million dollars more to others.
FirstEnergy Corp. will pay a quarterly dividend of 36 cents per share on June 1 to shareholders of record as of May 7.
FirstEnergy Corp. reported it lost $2.5 billion for its fourth quarter and $1.7 billion for the year. While those were significant losses in 2017 for the Akron utility, the numbers were a big improvement from fiscal 2016.
FirstEnergy said its fourth-quarter loss amounted to $5.62 per share on revenue of $3.4 billion. That compares to a 2016 fourth-quarter loss of $5.8 billion, or $13.44 per share, on revenue of $3.4 billion.
FirstEnergy had adjusted fourth-quarter earnings of 71 cents per share, up from 38 cents per share a year ago.
The company said it lost $1.7 billion, or $3.88 per share, on revenue of $14 billion for fiscal 2017 that ended on Dec. 31. That compares to a 2016 loss of $6.2 billion, or $14.49 per share, on revenue of $14.6 billion.
FirstEnergy had adjusted earnings of $3.07 per share for the year, compared to adjusted earnings of $2.63 per share for 2016.
Fourth-quarter and full-year results were impacted by noncash, pre-tax asset impairment and plant exit costs of $2.4 billion, or $3.38 per share, related to nuclear power plant assets and increasing nuclear asset retirement obligations, and also by reducing the carrying value of the Pleasants Power Station in West Virginia. FirstEnergy also recognized a fourth-quarter noncash charge to income tax expense of $1.2 billion, or $2.68 per share, related to the federal tax reform.
FirstEnergy said it also plans to spend more than $10 billion through 2021 on capital improvements on its regulated businesses.
FirstEnergy reported results after the stock market closed Tuesday.
Shares in FirstEnergy fell 25 cents, or 0.8 percent, to $32.80 on Tuesday. Shares are up 7.1 percent since Jan. 1 and are up 5.8 percent from a year ago. In after-hours trading Tuesday, FirstEnergy shares were up 3.2 percent as of 4:50 p.m.
“Throughout the past year, our company has made important progress in our transition to a fully regulated utility,” Charles E. Jones, president and chief executive officer, said in a news release. “This strategy and the opportunities for growth in our regulated businesses earned the confidence of prominent investors. With their equity investment earlier this year, we began 2018 with stronger corporate financial metrics, and we are well positioned to accelerate growth in our transmission and distribution businesses, as we continue our exit from competitive generation.”
FirstEnergy said it anticipates having adjusted earnings of $2.25 to $2.55 per share for fiscal 2018.
Company executives will host a conference call with industry analysts starting 10 a.m. Wednesday. The public can listen in by going online to http://www.firstenergycorp.com/ir.
The utility last week announced it will either sell or deactivate by year’s end its 1,300 megawatt coal-fired Pleasants Power Station, subject to regulatory approval.
The company also last week told state regulators it does not plan to reduce electricity rates following federal tax reform that cut corporate tax rates to 21 percent.
In January, Moody’s Investors Services said it appears likely that FirstEnergy Solutions, the utility’s unregulated power generation subsidiary, will default on a nearly $100 million bond payment due in April.
Moody’s comments came shortly after FirstEnergy said it received a $2.5 billion infusion from equity investors. The utility also formed a restructuring working group in anticipation of FirstEnergy Solutions taking action, including a possible bankruptcy filing, to address its significant debt burden.
FirstEnergy Corp. announced a new chairman of the board and also said it is shaking up its senior executive ranks in preparation for becoming a fully regulated utility.
FirstEnergy’s new board chairman is Donald T. Misheff. He succeeds George M. Smart, who plans to retire in May.
Also elected to the FirstEnergy board was Sandra Pianalto, former president of the Federal Reserve Bank of Cleveland. She succeeds William T. Cottle, who is retiring from the board.
Smart and Cottle reached the mandatory board retirement age of 72, FirstEnergy said.
Misheff, 61, has been a FirstEnergy director since 2012 and is the retired managing partner of the Northeast Ohio offices of Ernst & Young. He also serves as a director of TimkenSteel Corp., Trinseo S.A., and Aleris Corp.
Pianalto, 63, retired in May 2014 as president and chief executive officer of the Cleveland Fed. Pianalto also is a director of Eaton Corp., Prudential Financial Inc., and J.M. Smucker Co.
Smart was a director of Ohio Edison from 1988 until 1997, and became a FirstEnergy director when the utility was created in 1997 through the merger of Ohio Edison and Centerior Energy. He was elected FirstEnergy chairman in 2004.
Cottle has been a director of FirstEnergy since 2003. He retired as CEO of STP Nuclear Operating Co.
Also Tuesday, FirstEnergy announced nine senior management changes that it said are designed to support its transition to a fully regulated utility company and broaden the experience of key executives. The changes will become effective in early March.
The moves are:
• James F. Pearson, executive vice president and chief financial officer, to executive vice president, finance.
• Steven E. Strah, senior vice president and president, FirstEnergy Utilities, to senior vice president and chief financial officer.
• Jason J. Lisowski, controller and treasurer, FirstEnergy Solutions, to vice president, controller and chief accounting officer.
• Samuel L. Belcher, president and chief nuclear officer, FirstEnergy Nuclear Operating Co. (FENOC), becomes senior vice president and president, FirstEnergy Utilities.
• K. Jon Taylor, vice president, controller and chief accounting officer, to president of Ohio Operations.
• Charles D. Lasky, senior vice president, human resources, to senior vice president, human resources, and chief human resources officer.
• Christine L. Walker, executive director, talent management, to vice president, human resources.
• Donald A. Moul, president, FirstEnergy Generation at FirstEnergy Solutions, becomes president, FES Generation Cos. and chief nuclear officer.
• Kevin T. Warvell, vice president, commercial operations structuring and pricing, FirstEnergy Solutions, to vice president, chief financial officer, treasurer and corporate secretary at FirstEnergy Solutions.
FirstEnergy Corp. expects to deactivate a large coal-fired power plant in West Virginia by year’s end that can power 1.3 million homes.
The 1,300 megawatt Pleasants Power Station along the Ohio River in Willow Island, W.Va., will be closed or sold by Jan. 1, 2019, FirstEnergy said Friday in a news release.
The power plant is owned by FirstEnergy subsidiary Allegheny Energy Supply and has about 190 employees.
The plant deactivation is subject to review by PJM Interconnection, the regional transmission organization responsible for electric grid reliability where the power plant is located, the utility said.
FirstEnergy subsidiary Mon Power filed a plan in March 2017 seeking regulatory approval to acquire the Pleasants Power Station. The Federal Energy Regulatory Commission rejected the proposal on Jan. 12.
The utility said in a news release the acquisition would have resolved a projected 10-year energy capacity shortfall and decreased electric bills for customers.
The Public Service Commission of West Virginia had approved the sale subject to significant conditions, FirstEnergy said.
Those conditions, combined with the FERC rejection, make the proposed transfer unworkable, the utility said.
“Closing Pleasants is a very difficult choice because of the talented employees dedicated to reliable operation of the station and the communities who have supported the facility for many years.
“But the recent federal and West Virginia decisions leave FirstEnergy no reasonable option but to expeditiously move forward with deactivation of the plant,” Charles E. Jones, FirstEnergy president and chief executive officer, said in a news release. “We will continue to pursue opportunities to sell the plant while planning for deactivation.”
Affected employees may be eligible to receive severance benefits if the plant closes, FirstEnergy said.
Pleasants Power Station began making electricity in 1979.
It has two 650-megawatt coal-powered generating units.
Beginning in 2016, FirstEnergy announced the sale or closure of 2,471 megawatts of generation in neighboring states Ohio, Pennsylvania and Virginia.
Once the Pleasants plant is deactivated, FirstEnergy said it will own or control generating capacity totaling about 14,795 megawatts of power from coal, nuclear, natural gas and renewable energy plants in Ohio, Pennsylvania, West Virginia, New Jersey, Virginia and Illinois.
FirstEnergy said it continues to complete the strategic review of its remaining competitive generating fleet.
They always hoped they made a difference.
Perhaps helped her achieve a higher grade.
Sparked an interest in schoolwork.
Maybe even just brightened the young Akron student’s day with words of encouragement.
But then again, you just never know what the future holds.
It was back in 2007 when a pair of FirstEnergy employees decided to volunteer in the Akron Reads Program, where mentors meet weekly with Akron elementary school students who need a little additional help with their reading skills.
So Nancy Grayem and Susan Lloyd would head off to Robinson Elementary School to meet with an eager third-grader by the name of Laurensjai Humphries.
They tutored her through the school year and even gave her Christmas presents.
But at the end of the school year they parted ways.
Grayem, who now works as an executive assistant in Energy Delivery Transmission Operations, said she was looking across a list of new hires when her eyes stopped at a familiar name.
It was the spelling of the employee’s first name, Grayem said, that made her realize that the young girl that she shared a love of reading with had joined the ranks at FirstEnergy as a customer service representative in the company’s Fairlawn Contact Center off West Market Street.
She immediately called her old Akron Reads partner, Lloyd, who is a corporate librarian and advanced communications representative, with the good news.
“I think it is really great to make contact with Laurensjai again,” Grayem said. “A lot of people don’t get to see or hear what happens to the kids you tutor.”
And like old friends, the three picked up right where they left off — down to a corny old joke.
At a recent reunion, Grayem asked Humphries to repeat a joke she used to tell them.
“What do you call cheese that’s not yours?” Humphries asked. “Nacho cheese.”
Guffaws aside, Humphries admits “that’s still one of my favorite jokes.”
After graduating from East High School in 2016, she started work as a temporary employee in the call center before being hired full time by the company.
Humphries said that she loved school and that teachers and mentors like Lloyd and Grayem helped foster that desire to do well in classes.
“I loved Robinson,” she said. “I still go back to visit my old teachers.”
Grayem said it is really neat that Humphries now works at FirstEnergy too.
“This is all like a big circle,” she said. “It has come full circle.”
Carla Sibley, who helps run the Akron Reads program for Akron Public Schools, said this seems to be the first time in the nearly 20 years that the program has been around that a student has landed a job at the same place his or her mentor worked.
“This is pretty special,” she said. “This really speaks to the lasting connection a mentor can make with a young person.”
The program helps around 180 students a year with some 220 community and corporate volunteers. Volunteers meet around 20 times over the school year with a child who needs a little extra help to hone reading and spelling skills.
“For many of these young students, this is a positive interaction that may lead to more reading,” Sibley said.
Craig Webb can be reached at [email protected] or 330-996-3547.
COLUMBUS: The Ohio Supreme Court ruled Wednesday that the Public Utilities Commission of Ohio cannot order Akron-based FirstEnergy Corp. to refund $43 million to customers for the “imprudent” purchase of renewable energy credits made in 2010.
The court in a 6-1 decision said the state agency had approved adding the charges to customer bills and that ordering the refund violates a rule against “retroactive ratemaking.”
The PUCO in 2012 ordered FirstEnergy to refund residential customers by slightly reducing rates by an average of $5. But FirstEnergy opposed the order, leading to the court dispute.
Justice William M. O’Neill, who wrote the leading opinion, said the state’s “no-refund rule” may be perceived as unfair or sometimes results in a windfall for the utility company, but “it is the statutory scheme that requires this result,” and only the state legislature can change it.
The court also ruled that the PUCO did not provide adequate justification for agreeing with FirstEnergy to keep secret some information about participants and amounts paid while selecting and awarding bids to provide renewable energy.
The court said the commission must “provide more specific reasoning for sealing the information or … make it public.”
FirstEnergy agrees with the court’s decision, spokesman Doug Colafella said. He noted that FirstEnergy was not required to pay any refund while the court looked into the case.
“We’re pleased with the court’s decision,” Colafella said.
Justice Judith L. French was the lone dissenting vote.
In her opinion, she stated that FirstEnergy agreed to allow the PUCO to reduce charges to customers for energy credits that were not prudently purchased as part of an overall three-year rate plan, according to Court News Ohio. She wrote that the PUCO was entitled to audit the purchases at a later date to determine if refunds were justified.
“In effect, the commission and the parties needlessly went through more than two years of litigation at the commission when everyone involved should somehow have realized from the outset that FirstEnergy would be entitled to keep virtually all its [renewable energy certificate] costs, whether prudently incurred or not,” French wrote.
PUCO Chairman Asim Z. Haque issued a statement on the ruling.
“While the PUCO is reviewing the court’s decision, we are concerned that today’s ruling will have negative impacts on the agency’s ability to protect Ohio’s utility customers,” Haque said on Wednesday. “Our ability to effectively audit utility expenses is one of our most important regulatory responsibilities.”
The Ohio Consumers’ Counsel said the court ruling indicates the state government needs to act.
The “disappointing court decision again highlights one of the worst ways that Ohio’s rate-setting process is unfair to utility consumers — the law allows FirstEnergy and other utilities to keep unlawful charges instead of giving millions of dollars in refunds to consumers,” Dan Doron, Ohio Consumers’ Counsel spokesman, said.
“Ohioans need their legislature to take swift action to change the law so that utility consumers are protected in the future,” Doron said.
This week, Consumers’ Counsel Bruce Weston testified in favor of House Bill 247, “which would result in refunds of unlawful utility charges to consumers in the future,” Doron said.
The Consumers’ Counsel said his office had appealed to the court to require more refunds than what the PUCO ordered, but that request was denied.
The Consumers’ Counsel partly succeeded in its appeal in asking the court to make more information about the PUCO’s case process less secret and available to the public.
To read the full opinion, go to: http://www.courtnewsohio.gov/cases/2018/SCO/0124/132026.asp#.Wmiah5X2bct.