FirstEnergy Solutions, its subsidiaries and FirstEnergy Nuclear Operating Company (FENOC) on March 31 filed voluntary petitions under Chapter 11 of the Federal Bankruptcy Code with the U.S. Bankruptcy Court in the Northern District of Ohio in Akron. FirstEnergy Solutions said the move was made in order to “facilitate an orderly financial restructuring.”
FirstEnergy Solutions, its subsidiaries and FENOC collectively have over $550 million in cash, which they believe is sufficient liquidity to continue normal operations and meet post-petition obligations to employees, suppliers and customers as they come due, FirstEnergy Solutions, a subsidiary of investor-owned FirstEnergy Corporation, said in a March 31 news release.
FirstEnergy Solutions and FENOC own and operate two coal-fired plants, one dual fuel gas/oil plant, one pet-coke fired plant and three nuclear power plants in the competitive, or non-regulated, power-generation industry.
FirstEnergy Corp. announced in November 2016 that it planned to exit the competitive generation business.
On March 28, FirstEnergy Solutions filed notice with PJM that three of the company’s nuclear power plants would be deactivated or sold during the next three years. In the meantime, all of the plants will continue current operations, the company said.
The nuclear plants are: the 908-MW Davis-Besse Nuclear Power Station in Oak Harbor, Ohio, (scheduled for retirement in 2020), the 1,842-MW Beaver Valley Power Station in Shippingport, Pa., (scheduled for retirement in 2021), and the 1,268-MW Perry Nuclear Power Plant in Perry, Ohio, (scheduled for retirement in 2021).
FirstEnergy Solutions, its subsidiaries and FENOC expect that the Chapter 11 process will enable them to improve the viability of their operations and FirstEnergy Solutions will also continue seeking legislative and regulatory relief at the state and federal level.
FirstEnergy Solutions noted that on March 29, it filed an application with U.S. Secretary of Energy Rick Perry seeking an emergency order directing PJM to secure the long-term capacity of certain nuclear and coal-fired plants in the region – including FirstEnergy Solutions plants – to compensate their owners "for the full benefits they provide to energy markets and the public at large, including fuel security and diversity."
FirstEnergy Solutions said that as previously announced, it and FENOC “have engaged in constructive discussions with parties representing their creditors. Those discussions are continuing as the filing entities explore strategic alternatives for the competitive generation businesses.”
FirstEnergy Corp. and its other subsidiaries, including its regulated subsidiaries, are not part of the filing and will not be subject to the Chapter 11 process.
FirstEnergy management being advised by restructuring working group
In a separate March 31 news release, FirstEnergy said its management team is being advised by its restructuring working group, which has been engaged in substantive negotiations with a steering committee of FirstEnergy Solutions noteholders.
These discussions are expected to continue over the next several weeks. Additionally, the parties have joined an agreement filed with the U.S. Bankruptcy Court, Northern District of Ohio, for approval to advance an efficient discovery and settlement process, the utility said.
As of March 31, 2018, FirstEnergy Solutions, all of its subsidiaries, and FENOC will be deconsolidated from FirstEnergy's financial reporting.
Earlier this year, FirstEnergy announced plans for more than $10 billion in capital investments in its regulated businesses through 2021. This includes the company's 10 electric distribution utilities, which serve six million customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York and together form one of the nation's largest investor-owned electric systems, as well as its transmission operations, which include approximately 24,000 miles of lines and two regional transmission operation centers.
FirstEnergy's 3,779-MW regulated electric generation fleet includes four plants in West Virginia, Virginia and New Jersey. These are the 1,098 MW coal-fired Fort Martin Plant in Maidsville, W.Va.; the 1,984 MW coal-fired Harrison Plant in Haywood, W.Va.; 487 MW of regulated generation at the Bath County Hydro facility in Warm Springs, Va.; and 210 MW of hydro generation at the Yards Creek facility in Blairstown, N.J.
