Power Struggle

FirstEnergy wants looser environmental regulations, and state Republicans seem ready to oblige


hen FirstEnergy swooped into Cincinnati in June 2012, it arrived to welcoming arms and lavish praise when it was selected as the winning bidder in the city’s new energy aggregation program, a switch that ostensibly made Cincinnati the largest city in the country to use a 100-percent “green” energy supply. 

Since then, things have gone downhill for Akron, Ohio-based FirstEnergy — at least in the public eye — putting the $48 billion corporation at the epicenter of a statewide discussion on possible upcoming changes to the state’s clean energy laws, which environmental advocacy groups worry could slow down Ohio’s momentum in national efforts to address climate change and also significantly increase energy costs for Ohio consumers. 

As the state’s largest investor-owned utility company, comprising 40 percent of the state’s utility market, FirstEnergy holds a remarkable amount of power and influence; they power about 18 percent of Ohio. And in a state that’s notorious for its reliance on coal — about 78 percent of Ohio electricity comes from coal compared to about 37 percent of energy across the country — it’s an opportune subject in dialogue on Ohio’s energy industry as national regulations on coal and natural gas plants could shift the way the industry operates.   

FirstEnergy vocally supports amending Ohio’s 2008 clean energy laws with a new Senate bill to weaken requirements for utility companies, which FirstEnergy attests are putting a financial strain on well-meaning utility companies and their customers. 

Grassroots environmental advocacy group The Sierra Club, however, recently launched an advertising campaign against FirstEnergy, and claim the concern for customers is just a guise, another mark on the company’s systematic record of corporate greed and poor social responsibility. 

CityBeat obtained a copy of a report by the Ohio State University and the Ohio Advanced Energy Economy coalition scheduled be released Sept. 25 analyzing the possible economic implications of S.B. 58 — the Republican-backed amendment to review and possibly reverse S.B. 221, Ohio’s 2008 clean energy laws — which found that if implemented, Ohioans will spend $3.65 billion more on electricity bills over the next 12 years — directly in conflict with FirstEnergy’s prime concerns about saving customers money. 

Doug Colafella, spokesperson for FirstEnergy, says statistics like those in the report touting savings from energy efficiency are based too heavily on conjecture about future energy demand, supply and prices, and that they just aren’t reliable enough to warrant the massive financial undertakings required to meet the current standards. Dan Sawmiller, a senior campaign representative for the Sierra Club’s Beyond Coal Campaign, calls those claims absurd. “The electricity industry as a whole is based on assumptions of what prices are going to be in the future, what resources are going to be available in the future,” he says. 

Currently, Ohio’s 2008 Clean Energy Law mandates that by 2025, Ohio’s utility companies must source 25 percent of their electricity from alternative energy sources, 12.5 percent of which must be considered renewable. Republican Sen. Bill Seitz’s S.B. 58 would act as a placeholder while legislators review those regulations to consider amending, freezing or completely repealing them.

In August, PUCO unanimously ruled that FirstEnergy Corp. would have to refund its Ohio customers $43.3 million for overcharging for renewable energy credits (RECS) purchased from its affiliate, FirstEnergy Solutions. In 2009, the company was chastised for charging customers $21 for unsolicited pairs of energy efficient light bulbs — one of FE’s first tactics to comply with the 2008 energy regulations requiring utility companies to reduce customers’ electric usage. PUCO eventually halted the program, later allowing the company to reintroduce it under new rules. 

The Sierra Club even questions the company’s claims to provide Cincinnati with 100 percent “green” energy; Sawmiller says the company isn’t subject to adhere to a 

legal definition of what’s green or renewable, so it’s possible they could be using the term to describe “advanced” energy sources like scrubbed coal that aren’t technically renewable.

In response to the Sierra Club’s campaign, FirstEnergy has taken defense by touting its small successes — about 150,000 of FirstEnergy customers have requested energy efficiency kits, which Colafella calls the company’s “low-hanging fruit” — simple, inexpensive ways to lessen customers’ energy usage. 

Those programs will eventually lose their effectiveness, admits Colafella, and they’re not part of the fundamental reform that will be required to meet the 25 percent reduction goal. That’s where the expenses might come in play for corporations like FirstEnergy, not its consumers, according to the Sierra Club and the Sept. 25 report from Ohio Advanced Energy Economy. 

On Sept. 20, the Environmental Protection Agency (EPA) proposed historic new regulations on carbon limits for new power plants — one of the first major steps in the Obama administration’s Climate Action Plan. The new regulations on CO2 emissions will make building coal plants in the future nearly impossible, which isn’t expected to act as a huge blow to utility companies that are shifting toward natural gas plants as a cheaper and cleaner alternative anyway. The EPA is expected to announce separate regulations on existing power plants in the future. 

That shift in the way the federal government deals with climate change and utility industries could contrast sharply with legislation in Ohio if Seitz’s S.B. 58 is passed. For now, Sawmiller is asking consumers to reconsider their electric providers and boycott FirstEnergy as a way to hold the corporation accountable for its attacks on clean energy. 

“You can’t let this company talk out of both sides of its mouth,” Sawmiller says. “They can’t come out and tell us how great energy efficiency is for us, tell us how much money their customers are saving, and then on the other hand tell us, ‘Yeah, we gotta get rid of these things.’ You know, it’s one or the other. Is it good for your customers or is it not?” ©

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