FirstEnergy's Annual Meeting Is Quiet While Bankruptcy Rumors Swirl

May 16, 2017

The annual meeting of FirstEnergy raised just one question from a shareholder. But the CEO of the Akron-based utility acknowledges a lot of unspoken questions are swirling around the future of the company. 

FirstEnergy says without a bailout, its power-generating subsidiary may go bankrupt
Credit FirstEnergy

FirstEnergy is pushing a bill in the Ohio Statehouse that opponents call a bailout and it calls ZEN – an acronym for Zero-Emissions Nuclear Resource. The utility says that would compensate FirstEnergy for the “unique benefits” of its nuclear plants.

CEO Chuck Jones plans to testify for the bill in the Ohio Senate Thursday. But he acknowledged to reporters after the meeting that its future is uncertain and may come too late to stave off bankruptcy of its generating division: First Energy Solutions.

“With the Zen, it would be better for the company, but it’s never going to be lucrative.” 

Jones said shedding the nuclear plants may be better for shareholders.

“But I don’t run this company worried 100 percent about shareholders. I worry about our communities and our customers and this state and jobs.” 

The only question raised by the audience was whether renewable energy options would still be available to customers if FirstEnergy moves out of the deregulated market. Jones said that’s FirstEnergy’s intent.

The company shot down a push by a shareholder to force it to develop a climate change strategy.
Credit FIRSTENERGY

FirstEnergy has more than 14,000 employees and Jones says his goal is to keep the company headquartered in Akron. 

In the meeting with reporters, Jones ran through just some of the acronyms that govern energy generation in the U.S.

“It shouldn’t have to be solved state by state by state. Now whether that’s PJM, or FERC or the DOE study, a more regional national solution to this problem I think is the way to solve it.” :17

The problem is what to do about the costs of operating aging nuclear and coal plants – especially at a time when the cost of natural gas and renewable energy has come down. About half of FirstEnergy’s power comes from coal.

While that share is coming down, Jones maintains that nuclear and coal should remain part of a national energy strategy. A shareholder motion that called for FirstEnergy to create a climate change strategy that focuses on clean power failed to pass.

Jones praised the Trump Administration and Energy Secretary Rick Perry for ordering a study of the nation's electric grid.