- FirstEnergy remains committed to exiting the commodity-exposed generation business, despite the possibility that changes to wholesale markets could provide some of the company's struggling plants with a lifeline.
- CEO Charles Jones said last week during an earnings call with analysts that FirstEnergy supports a US Department of Energy proposal to compensate coal and nuclear plants for the resilience they bring to the grid, but the company is committed to becoming fully regulated.
- Competitive subsidiary FirstEnergy Solutions (FES) has been flirting with bankruptcy and Jones said the FES board would be responsible for determining whether to seek bankruptcy protection.
FirstEnergy's chief is adamant: the company is getting out of the merchant business, no matter how tempting the Department of Energy's notice of proposed rulemaking (NOPR) might sound.
"FirstEnergy's strategy is to become fully regulated," Jones told analysts and reporters. "We have no interest in maintaining generating assets that have commodity exposure and we're moving forward with exiting the commodity-exposed generation business."
FES began discussions with creditors in September, and Jones said those discussions are ongoing. A data room has been opened and companies are doing their due diligence. I think the preferred outcome is to get a settlement with creditors," he said.
But the Department of Energy issued a NOPR calling on the Federal Energy Regulatory Commission to develop rules to provide cost recovery for plants with a 90-day supply of fuel onsite. FirstEnergy is closely watching the situation, Jones said, but not in hopes of reversing its plans.
The company said last year it was considering the sale of 13 plants, mostly coal and nuclear units that have struggled to compete against cheap natural gas-fired power.
"The FES Board has the responsibility of deciding whether FES will seek protection under a Chapter 11 filing and they have several key considerations in making that decision," Jones said, "including the outlook for the DOE's proposed rule and FERC's actions as well as the status of discussions with creditors' advisors."
The company reported third quarter 2017 GAAP earnings of $396 million on revenue of $3.7 billion. In the same quarter last year, FirstEnergy reported GAAP earnings of $380 million on revenue of $3.9 billion.