A major utility company that provides nuclear and coal power is filing for bankruptcy days after it pleaded for a government bailout.
FirstEnergy Solutions, the unit of FirstEnergy Corp. responsible for competitive generation, announced late Saturday it was filing for Chapter 11 protection.
FirstEnergy Corp. CEO Charles Jones said the move would make the parent company more financially stable.
“FirstEnergy will remain focused on creating long-term value for its customers, employees and shareholders,” Jones said in a statement. “Becoming a fully regulated utility company should give FirstEnergy a stronger balance sheet, solid cash flows and more predictable earnings. Simply put, we will be better positioned to deliver on the tremendous opportunities for customer-focused growth.”
The decision comes after FirstEnergy announced last Thursday that its nuclear power arm was struggling and as a result the company would be closing three of its plants located in Ohio and Pennsylvania. The three plants represented about 65 percent of FirstEnergy Solutions’s generating capacity.
The same day the company also sent a request to the Department of Energy asking Secretary Rick PerryJames (Rick) Richard PerryEnergy groups, greens slam utility’s plea for emergency rescueUtility asks Perry to save coal, nuclear plantsUtility to close 3 nuclear power plantsMORE to intervene to keep the nuclear plants functioning.
The company referenced a section of the Federal Power Act that allows for the government to keep coal and nuclear plants open through natural disasters, wars and other emergencies. Economic conditions have previously not been a reason for using the law to pay plants for providing power.
Donald Schneider, president of FirstEnergy Solutions, said in a statement that inaction would lead to “significant, negative outcomes” for the approximately 65 million people who depend on the plants.
Competing energy sectors as well as environmental groups fiercely challenged the bailout request, however, saying FirstEnergy was misleading the Energy Department and the public into thinking the electric grid is at a far higher risk of failure without coal and nuclear plants than it is.
FirstEnergy’s plants are just the latest in a long line of nuclear plant closures stemming from strong competition from cheap natural gas and renewable energy.
The Trump administration has taken notice.
Perry last year proposed higher payments to nuclear and coal power plants to save them from closing. But the Federal Energy Regulatory Commission said it would not be legal, and rejected the proposal.
FirstEnergy was a very outspoken supporter of Perry’s plan. The company also has significant coal-fired generation capacity.