UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
FirstEnergy Solutions Corp.
)
Docket No. ER16-1807-000
The Cleveland Electric
Illuminating Company
)
)
Docket No. ER10-1469-004
Ohio Edison Company
)
Docket No. ER10-1467-004
The Toledo Edison Company
)
Docket No. ER10-1468-004
FirstEnergy Solutions Corp.
)
Docket No. ER10-1459-008
FirstEnergy Generation, LLC
)
Docket No. ER13-785-003
FirstEnergy Nuclear Generation, LLC
)
Docket No. ER13-713-003
FirstEnergy Generation
Mansfield Unit 1 Corp.
)
)
Docket No. ER10-1453-004
Electric Power Supply Association,
Retail Energy Supply Association,
Dynegy Inc., Eastern Generation, LLC,
NRG Power Marketing LLC and GenOn
Energy Management, LLC
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Docket No. EL16-34-000
v.
FirstEnergy Solutions Corporation, Ohio
Edison Company, The Cleveland Electric
Illuminating Company and The Toledo
Edison Company
(Not consolidated)
COMMENTS OF THE ENVIRONMENTAL DEFENSE FUND AND THE OHIO
ENVIRONMENTAL COUNCIL
The Environmental Defense Fund (“EDF”) and the Ohio Environmental Council
(“OEC”) submit the following comments regarding the adverse environmental impacts
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that would be caused by actions under and in connection to the May 27, 2016 filings 1 by
affiliates of FirstEnergy Corporation (“FirstEnergy”). FirstEnergy has replaced an affiliate
Power Purchase Agreement (“PPA”), held to be inconsistent with Federal Energy
Regulatory Commission (the “Commission” or “FERC”) waiver provisions as provided in
a April 27, 2016 Commission Order, 2 with a virtual power purchase agreement (“virtual
PPA”). This virtual PPA mirrors the negative environmental and consumer impacts
inherent in the original PPA. It likewise mirrors many of the same elements contained in
the original PP, such as a sale of capacity which necessitates FERC review. By
shielding FirstEnergy from prevailing, competitive market forces, the virtual PPA not
only subjects captive customers in Ohio to artificially inflated prices 3, but also needlessly
commits Ohioans to procuring energy from aging facilities that are more costly and
polluting than many of the increasingly cost-effective and less polluting alternatives
available in the competitive energy and capacity markets. Indeed, the Virtual PPA is
structured to do precisely this, with a termination clause to be enforced should the
covered plants be shut down, showing that the power the utility will supply to customers
(and the Virtual PPA itself) depends on the continued operation of these plants.
Coal-fired power plants – like those FirstEnergy hopes to bail out under its virtual
PPA – are a major pollution source. For example, despite only producing 33% of the
1
Notice of Change in Status, Docket Nos. ER10-1469-004, et al. (filed May 27, 2016) (the “Change in
Status Filing”); Tariff Filing, Docket No. ER16-1807-000 (filed May 27, 2016) (the “Tariff Filing” and
together with the Change in Status Filing, the “May 27 Filings”).
2
Electric Power Supply Ass’n v. FirstEnergy Solutions Corp., 155 FERC ¶ 61,101 (2016) (the “April 27
Order”).
3
Second Supplemental Direct Testimony of James F. Wilson on Behalf of the Office of the Ohio
Consumers’ Counsel and Northeast Ohio Public Energy Council at 12, PUCO Case No. 14-1297-EL-SSO
(filed Dec. 30, 2015), http://dis.puc.state.oh.us/TiffToPDf/A1001001A15L30B45750G02894.pdf.
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nation’s electricity in 2015, 4 coal-fired power plants were responsible for 71% of CO2
emissions associated with electricity generation in the same year. 5 Coal-fired power
plants are also the nation’s largest source of airborne toxic mercury emissions. 6 The
coal-fired power plants at issue in the Virtual PPA are not only polluting but costly.
FirstEnergy, in effect, seeks not only a bad economic outcome for its customers, but a
poor environmental and public health outcome as well. And due to the length of the
virtual PPA, FirstEnergy would force Ohioans to subsidize the continued use of these
polluting plants for years to come.
At the same time as FirstEnergy is doubling down on uneconomic power – and
forcing Ohioans to foot the bill for doing so – cheaper and cleaner alternatives are
becoming more economic. Inhibiting these resources by allowing an uneconomic
outcome endangers both efficient outcomes and associated air quality improvements.
FirstEnergy’s requested bailout stands in stark opposition to efficient electricity markets
by discouraging investment in grid modernization, and making it harder for innovative,
cost-effective, and clean resources to fairly compete. Applicable law, policy, and
economics require preference of cost-competitive energy resources. FirstEnergy, by
ignoring this preference while also causing increased pollution, creates significant threat
to the wholesale market, environment, and public health. EDF and OEC thus
respectfully request that the Commission deny FirstEnergy’s virtual PPA.
4
EIA, Frequently Asked Questions (April 1, 2016), https://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3.
EIA, Frequently Asked Questions (April 1, 2016), http://www.eia.gov/tools/faqs/faq.cfm?id=77&t=11.
6
EDF, Mercury Alert: Cleaning Up Coal Plants for Healthier Lives (March 2011),
https://www.edf.org/sites/default/files/EDF-mercury-report-27mar2011-revised.pdf.
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3
Respectfully submitted,
ENVIRONMENTAL DEFENSE FUND
By:
/s/ Michael Panfil
Michael Panfil
John Finnigan
Environmental Defense Fund
1875 Connecticut Ave., NW
Washington, DC 20009
On behalf of Environmental Defense Fund
OHIO ENVIRONMENTAL COUNCIL
By:
/s/ Trent Dougherty
Trent Dougherty
Ohio Environmental Council
1145 Chesapeake Avenue
Columbus, OH 43212
On behalf of Ohio Environmental Council
Dated: June 17, 2016
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CERTIFICATE OF SERVICE
I hereby certify that I have this day served the foregoing document on each
person designated on the official service list compiled by the Secretary of the Federal
Energy Regulatory Commission in this proceeding.
Dated at Washington DC, this 17th day of June, 2016.
/s/ Michael Panfil
Michael Panfil
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