FirstEnergy

FirstEnergy Corp. is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission, and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation’s fifth largest investor-owned electric system, based on serving 4.5 million customers within a 36,100-square-mile area of Ohio, Pennsylvania, and New Jersey; its generation subsidiaries control more than 14,000 megawatts of capacity. In 2007, FirstEnergy ranked 212 on the Fortune 500 list of the largest public corporations in America.

In February 2010, FirstEnergy announced plans to buy Pennsylvania's Allegheny Energy for $4.7 billion in stock to create one of the largest U.S. utilities. Together, the companies would include ten electric distribution utilities with six million customers and approximately 24,000 megawatts of generating capacity across seven states – Ohio, Pennsylvania, West Virginia, Virginia, New Jersey, New York and Maryland. The company will have approximately $48 billion in assets and $16 billion in annual revenues. The merger was approved and closed on February 25, 2011.

Negative tax rate
A 2011 analysis by Citizens for Tax Justice and the Institute on Taxation and Economic Policy, "Corporate Taxpayers & Corporate Tax Dodgers: 2008-10" found dozens of companies, including fossil fuels, used tax breaks and various tax dodging methods to have a negative tax balance between 2008 and 2010, while making billions in profits. The study found 32 companies in the fossil-fuel industry -- such as Peabody Energy, ConEd, and PG&E -- transformed a tax responsibility of $17.3 billion on $49.4 billion in pretax profits into a tax benefit of $6.5 billion, for a net gain of $24 billion.

The companies that paid no tax for at least one year between 2008 and 2010 are the utilities Ameren, American Electric Power, CenterPoint Energy, CMS Energy, Consolidated Edison, DTE Energy, Duke Energy, Entergy, FirstEnergy, Integrys, NextEra Energy, NiSource, Pepco, PG&E, PPL, Progress Energy, Sempra Energy, Wisconsin Energy and Xcel Energy.

CEO compensation
In May 2007, Forbes listed Xcel CEO Anthony J. Alexander as receiving $8.5 million in total compensation for the latest fiscal year, with a four-year total compensation of $23.08 million. He ranked 16th on the list of CEOs in the Utilities industry, and 270th among all CEOs in the United States.

Power portfolio
Out of its total 14,819 MW of electric generating capacity in 2005 (1.39% of the U.S. total), FirstEnergy produces 54.0% from coal, 27.6% from nuclear, 8.6% from natural gas, 6.4% from hydroelectricity, and 3.4% from oil. FirstEnergy owns power plants in Michigan, New Jersey, Ohio, and Pennsylvania; 65.9% of the company's generating capacity comes from Ohio.

Rates
FirstEnergy has come under fire for charging prohibitive rates in the Ohio area. In response, the Ohio Public Utility Commission has asked for bids from other energy companies. .

EPA releases list of 44 "high hazard" coal ash dumps
In response to demands from environmentalists as well as Senator Barbara Boxer (D-California), chair of the Senate Committee on the Environment and Public Works, the EPA made public a list of 44 "high hazard potential" coal waste dumps. The rating applies to sites at which a dam failure would most likely cause loss of human life, but does not include an assessment of the likelihood of such an event. FirstEnergy owns one of the sites, which stores coal combustion waste for the Bruce Mansfield Power Station in Pennsylvania. To see the full list of sites, see Coal waste.

2010 study linking coal ash and groundwater contamination
In August 2010 a study released by the Environmental Integrity Project, the Sierra Club and Earthjustice reported that Pennsylvania, along with 34 states, had significant groundwater contamination from coal ash that is not currently regulated by the Environmental Protection Agency (EPA). The report noted that most states do not monitor drinking water contamination levels near waste disposal sites. The report mentioned FirstEnergy's Bruce Mansfield Power Station and Hatfield's Ferry Power Station as both having groundwater contamination due to coal ash waste.

Proposed expansion of Blue Run Waste Site
In Feb. 2011, FirstEnergy said it wants to expand the Bruce Mansfield Power Station Little Blue Run Dam coal ash site for the Bruce Mansfield Power Station, as the waste site is nearing capacity. The company wants to pay Greene Township, Beaver County, for the right to dump more coal waste on adjacent land it bought for $2.4 million in 2010. The surface impoundment is on the EPA's official June 2009 list of Coal Combustion Residue (CCR) Surface Impoundments with High Hazard Potential Ratings. The rating applies to sites at which a dam failure would most likely cause loss of human life, but does not assess of the likelihood of such an event. The site has also been found to be contaminating groundwater.

FirstEnergy Corp. has offered Greene Township $15 million to embrace plans for the new 264-acre coal-ash disposal impoundment. Township Secretary Sandra J. Wright said the town will not consider the offer until the company submits information about the potential harms it may pose to the community: "The supervisors would have to change the zoning from agriculture to industrial, but the residents want to keep the rural character of the township." FirstEnergy has yet to submit plans for the coal ash disposal site to the township, which is along the West Virginia border in the southwestern portion of the county. "We're constantly getting people calling us to complain about odors and this and that" related to Little Blue, Ms. Wright said. FirstEnergy's 2,375-megawatt Bruce Mansfield Power Station in nearby Shippingport has dumped 100 million tons of fly ash at the site produced from coal burning and calcium sulfate collected by the plant's pollution control devices. Little Blue, once a cobalt-blue lake, is 400 feet deep and nearly filled to the top with waste from coal burning. The former owner of the power plant created the impoundment 35 years ago by building a 400-foot-high dam across Little Blue Run near its confluence with the Ohio River.

Concerned residents and the Environmental Integrity Project, a national environmental group, say the unlined waste site poses risks of heavy metal contamination of well water. Continuing debate over potential environmental and health risks from Little Blue was detailed in the Post-Gazette's "Mapping Mortality" series published in December. In that series, the Post-Gazette's ecological study of mortality rates for heart and respiratory disease and lung cancer revealed elevated rates for the combined area of Greene Township, Hookstown and Georgetown. Heart disease deaths there were 46 percent higher than the national rate. The total of 88 deaths from all three diseases also was 42 percent higher than the predicted number of 62 deaths, based on national rates from 2000 through 2008. A community survey showed overwhelming opposition to the waste expansion. The township will await submission of a final plan before making further comment.

Lawsuits
On May 30, 2012, Little Blue Run Regional Action Group, a coalition of residents living near the impoundment, filed a lawsuit against utility company FirstEnergy, charging in their notice of intent that FirstEnergy violated state laws by exceeding pollution limits, and federal laws by failing to disclose toxic releases. On July 27, 2012, the Pennsylvania Department of Environmental Protection (PA DEP) filed the first-ever lawsuit against a coal ash dump operator for causing a potential “imminent and substantial endangerment” to human health and the environment. The PA DEP’s suit was filed with a consent decree that includes $800,000 in penalties and also mandates FirstEnergy to devise a plan to clean up contaminated groundwater surrounding the impoundment.

Bay Shore Plant Contaminating Fish
In early June, 2010 Ohio environmental groups stated that the Bay Shore Plant along Maumee Bay is killing more fish than any other plant on the Great Lakes, costing Ohio $29.7 million annually. The Ohio Environmental Council, the Western Lake Erie Waterkeepers Association, Ohio Citizen Action and other groups are urging the Ohio EPA to make FirstEnergy, the owner of the plant, to install cooling towers at the plant -- which touches the Maumee River on one side and the Maumee Bay on the other -- in order to reduce the fish kills.

Campaign Contributions
FirstEnergy is one of the largest contributors to both Republican and Democratic candidates for Congress. These contributions total $387,550 to the 110th US Congress (as of the third quarter), the largest of which have been to John Boehner (R-OH)for $17,500. Rep. Boehner, for his part, has taken over $113,250 in total coal contributions and has consistently voted with the coal industry on energy bills. Running a close second is Rep. George Voinovich (R-OH), wih $17,200, who has also been consistent in his support for fossil fuels. 

Contributions like this from from fossil fuel companies to members of Congress are often seen as a political barrier to pursuing clean energy.

More information on coal industry contributions to Congress can be found at FollowtheCoalMoney.org, a project sponsored by the nonpartisan, nonprofit Oil Change International and Appalachian Voices.

Among the worst corporations
FirstEnergy was named one of "the 10 worst corporations of 2006" by Russell Mokhiber and Robert Weissman, in an article in the November / December 2006 issue of Multinational Monitor magazine. "In January 2006," the company "agreed to pay $28 million to settle criminal charges that it made false statements to the U.S. Nuclear Regulatory Commission," they wrote. "Under the agreement, the company admitted that the government was able to prove that its employees, acting on its behalf, knowingly made false representations to the Nuclear Regulatory Commission (NRC) in the course of attempting to persuade the NRC that its Davis-Besse Nuclear Power Station was safe to operate."

Mokhiber and Weissman also pointed to another incident: "In Pennsylvania, the Department of Environmental Protection fined FirstEnergy Generation Corp. $25,000 for a 'stack rain out' that covered more than 300 Beaver County homes and properties in a black, sooty material July 22, 2006. The material came from the tall stack of the company's Bruce Mansfield power plant in Shippingport Borough." The $25,000 fine was "the maximum penalty allowed by the state's Air Pollution Control Act."

Denying responsibility for Davis-Besse
In an "attempt to win a $200 million insurance dispute," FirstEnergy publicly reversed course on its responsibility for the near-catastrophe at the Davis-Besse nuclear plant near Toledo, Ohio. "FirstEnergy has abruptly shrugged off the blame it once accepted for repeatedly missing a football-size rust hole growing in the lid of the radioactive, high-pressure reactor," reported The Plain Dealer. "At the time, the utility paid $33.5 million in criminal and civil fines to acknowledge its culpability for failing to stop the corrosion and for misleading government regulators." 

FirstEnergy then claimed that "corrosion ate through the steel lid so quickly -- in four months, not the previously accepted four years -- that normal biennial inspections couldn't have caught it." The "new version of events" was put forward by Exponent Failure Analysis Associates, a consultant to FirstEnergy. But the consultant's report didn't explain "the rivers of rust that workers photographed on the reactor lid in 2000, 18 months before Exponent says major corrosion is supposed to have begun." 

On January 20, 2006, FirstEnergy acknowledged a cover-up of serious safety violations by former workers at Davis-Besse, and accepted a plea bargain with the U.S. Department of Justice in lieu of possible federal criminal prosecution. In the agreement, the company agreed to pay fines of $23 million, with an additional $5 million to be contributed toward research on alternative energy sources and to Habitat for Humanity as well as to pay for costs related to the federal investigation. In addition, two former employees and one former contractor were indicted for purposely deceiving Nuclear Regulatory Commission (NRC) inspectors in multiple documents (including one videotape) over several years, hiding evidence that the reactor pressure vessel was being seriously corroded by boric acid. The maximum penalty for the three is 25 years in prison. The indictment also cites other employees as providing false information to inspectors, but does not name them.

In 2005, the NRC identified two earlier incidents at Davis-Besse as being among the top five events (excluding the actual disaster at Three Mile Island) most likely to have resulted in a nuclear disaster in the event of a subsequent failure.

Signal Peak Mine Reopens
Formerly known as the Bull Mountain mine, the Signal Peak mine, operated by Signal Peak Energy, was reopened for operation in September of 2009. The mine has newly built access to the Burlington Northern Santa Fe railroad that leads to the BNSF's main rail line in Broadview, Montana. The 35 mile line was built at a cost of $105 million.

"This is a mine that will add 25 percent to the over all coal mining that we do in Montana," stated Montana Governor Brian Schweitzer at the mine's reopening.

The Boich Group and FirstEnergy invested $400 million to reopen the mine, which will produce an estimated 12.5 million tons of annually by the end of 2010. On December 3, 2009 the companies announced that they planned to sell much of the coal to growing Asian markets.

November 2011: FirstEnergy sells stake in Montana coal mine to Gunvor Group unit
It was announced in October 2011 that FirstEnergy sold a portion of its stake in Montana's Signal Peak coal mine to a unit of worldwide independent commodity trader Gunvor Group for $260 million. The transaction allows FirstEnergy to retain one-third ownership in Signal Peak along with Boich Group, another Ohio company that bought the mine in a joint venture with FirstEnergy.

Coal lobbying
FirstEnergy is a member of the American Coal Ash Association (ACAA), an umbrella lobbying group for all coal ash interests that includes major coal burners Duke Energy, Southern Company and American Electric Power as well as dozens of other companies. The group argues that the so-called "beneficial-use industry" would be eliminated if a "hazardous" designation was given for coal ash waste.

ACAA set up a front group called Citizens for Recycling First, which argues that using toxic coal ash as fill in other products is safe, despite evidence to the contrary.

Other notable accidents and incidents
The 2003 North American blackout was caused by the failure of FirstEnergy to trim the trees around their high voltage lines in a certain sector of Ohio; heat and extreme power needs caused the lines to sag, coming into contact with the trees and causing power failure. See 2003 North American blackout for more details.

The Pennsylvania Public Utility Commission voted on January 16, 2004, to investigate FirstEnergy subsidiaries Metropolitan Edison, Pennsylvania Electric and Pennsylvania Power, because their service reliability "may have fallen below established standards." A quarter century earlier, GPU's Three Mile Island was the scene of the worst civilian nuclear accident in U.S. history.

Existing coal-fired power plants
FirstEnergy owned 25 coal-fired generating stations in 2005, with 8,005 MW of capacity. Here is a list of FirstEnergy's coal power plants:

In 2006, FirstEnergy's 7 coal-fired power plants emitted 45.2 million tons of CO2 (0.75% of all U.S. CO2 emissions) and 340,000 tons of SO2 (2.27% of all U.S. SO2 emissions).

In addition, FirstEnergy subsidiary Allegheny Energy owned 22 coal-fired generating stations in 2005, with 7,636 MW of capacity. Here is a list of Allegheny's coal power plants with capacity over 100 MW:

In 2005, these coal-fired power plants emitted 43.2 million tons of CO2 (0.7% of all U.S. CO2 emissions) and 328,000 tons of SO2 (2.2% of all U.S. SO2 emissions).

Death and disease attributable to fine particle pollution from First Energy coal plants
In 2010, Abt Associates issued a study commissioned by the Clean Air Task Force, a nonprofit research and advocacy organization, quantifying the deaths and other health effects attributable to fine particle pollution from coal-fired power plants. Fine particle pollution consists of a complex mixture of soot, heavy metals, sulfur dioxide, and nitrogen oxides. Among these particles, the most dangerous are those less than 2.5 microns in diameter, which are so tiny that they can evade the lung's natural defenses, enter the bloodstream, and be transported to vital organs. Impacts are especially severe among the elderly, children, and those with respiratory disease. The study found that over 13,000 deaths and tens of thousands of cases of chronic bronchitis, acute bronchitis, asthma, congestive heart failure, acute myocardial infarction, dysrhythmia, ischemic heart disease, chronic lung disease, and pneumonia each year are attributable to fine particle pollution from U.S. coal plant emissions. These deaths and illnesses are major examples of coal's external costs, i.e. uncompensated harms inflicted upon the public at large. Low-income and minority populations are disproportionately impacted as well, due to the tendency of companies to avoid locating power plants upwind of affluent communities. To monetize the health impact of fine particle pollution from each coal plant, Abt assigned a value of $7,300,000 to each 2010 mortality, based on a range of government and private studies. Valuations of illnesses ranged from $52 for an asthma episode to $440,000 for a case of chronic bronchitis.

Table 1: Death and disease attributable to fine particle pollution from First Energy coal plants
Source: "Health Impacts - annual - of Existing Plants," Clean Air Task Force Excel worksheet, available under "Data Annex" at "Death and Disease from Power Plants," Clean Air Task Force.

Note: This data includes the following plants owned by First Energy: Ashtabula, Eastlake, Bay Shore, Bruce Mansfield, W.H. Sammis, R.E. Burger, Lake Shore

2013: Mitchell and Hatfields
In July 2013 FirstEnergy announced that it planned to decommission its Hatfields Ferry Power Station and Mitchell Power Station by October 2013 rather than meet the costs of complying with the Environmental Protection Agency's Mercury and Air Toxics Standards (MATS).

May 2012: Three coal station closures delayed
On May 2, 2012, FirstEnergy said it was delaying the anticipated 2012 closing of its Lake Shore Plant, Ashtabula Plant, and Eastlake Power Plant until 2015 so that it could make upgrades to its transmission lines.

February 2012: FirstEnergy subsidiary to close three coal plants
On February 8, 2012, FirstEnergy announced that its Monongahela Power Company (Mon Power) subsidiary would be retiring three older coal-fired power plants located in West Virginia by September 1, 2012: Albright Power Station, Willow Island Power Station, and Rivesville Power Station. The total capacity of the regulated plants is 660 megawatts (MW), about 3 percent of FirstEnergy’s total regulated and competitive generation portfolio. Recently, the plants had served mostly as peaking facilities, generating around less than 1 percent of the electricity produced by FirstEnergy over the past three years. The company said the decision to close the plants was based on the EPA's Mercury and Air Toxics Standards (MATS) that were recently finalized, and other environmental regulations.

January 2012: FirstEnergy to close six plants by September
On January 26, 2012, FirstEnergy said it is permanently closing six of its coal plants by September 1, 2012: Bay Shore Plant, Units 2-4, in Oregon, Ohio; Eastlake Power Plant in Eastlake, Ohio; Ashtabula Plant in Ashtabula, Ohio; Lake Shore Plant in Cleveland, Ohio; Armstrong Power Station in Adrian, Pennsylvania; and the R. Paul Smith Power Station in Williamsport, Maryland.

The company said the decision to close the plants is based on the EPA's Mercury and Air Toxics Standards (MATS), which were recently finalized, and other environmental regulations. The total capacity of the retired plants is 2,689 megawatts (MW). Recently, the plants served mostly as peaking or intermediate facilities, generating approximately 10 percent of the electricity produced by the company over the past three years.

September 2010: FirstEnergy to close four plants
On August 12, 2010, FirstEnergy announced it will throttle back power production at four of its smaller, coal-burning power plants, beginning in September and continuing for three-years. The company cited the lackluster economy, low demand for power, and pending federal rules tightening emission standards. The plants are the Lake Shore Plant in Cleveland, OH, all but the largest boiler at the Eastlake Power Plant in Lake County, OH, the Ashtabula Plant, and three of four boilers at the Bay Shore Plant near Toledo, OH. The largest Bay Shore unit, which burns petroleum coke from the nearby BP/Husky oil refinery, will continue operating.

The four power plants have not been running flat out for some time; instead, the company has kept them in reserve, ramping up production as needed. Altogether the power plants have a total generating capacity of 1,620 megawatts, they accounted for less than 7 percent of total production in 2009. One megawatt is 1 million watts and enough electricity to power about 800 homes. FirstEnergy said the slowdown will reduce operating costs but could force the company to write off $287 million in the value of its assets, reducing third quarter earnings by 59 cents per share.

Burger Plant
On April 1, 2009, FirstEnergy announced that it is retrofitting the R.E. Burger power plant in eastern Ohio to produce electricity from woody biomass instead of coal, which would make it one of the largest such facilities in the U.S. The conversion will cost about $200 million. FirstEnergy had faced an April 2 deadling to either close the plant, install $330 million in pollution controls, or convert to biomass.

In November 2010 decided not to pursue the biomass option. The company cited the reason as an economic one, stating it was too expensive to undertake.

According to a Nov. 17, 2010 report from Power-Gen Worldwide, FirstEnergy Corp. is planning to permanently shut down two coal-fired units, Units 4 and 5, at the Burger Plant by the end of 2010. The units were included in the 2005 Consent Decree settlement with the U.S. Environmental Protection Agency, and FirstEnergy had the option to re-power, install scrubbers, or shut down the units as part of an effort to reduce the company's sulfur dioxide emissions. Rather than refit the Burger plant units, First Energy will complete a $1.8 billion retrofit at its Sammis Plant in Stratton, Ohio, according to the report.

FirstEnergy's Lake Shore Plant and Environmental Justice
FirstEnergy's Lake Shore Plant is in the Glenville community of Cleveland, Ohio, near Lake Erie and in close proximity to a large population of low income African Americans. Within a three mile radius of the plant, 85% of the 100,000 plus residents are African Americans with an average income of $10,000 per year, raising issues around environmental justice and coal. Lake Shore is among over 100 coal plants near residential areas.

Ohio Edison Company, W.H. Sammis Power Station, Clean Air Act Settlement
On August 12, 2009 Ohio Edision Company, a subsidiary of FirstEnergy Corp., agreed to a consent decree issues by the U.S. Justice Department and the U.S. EPA to repower two of the R.E. Burger's coal-fired power plant units using primarily biomass fuels (trees, grasses, agricultural crops and wood products). The decree modifies a 2005 consent decree of a similar nature, requiring Ohio Edison to reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from its coal-fired power plants. The EPA estimates that carbon dioxide (CO2) emissions from the plant, along with SO2 and NOx will decrease by approximately 1.3 million tons per year.

FirstEnergy's, as part of a $1.5 billion project to reduce toxic air pollutants, will be installing a flue gas desulfurization devices (scrubbers) on all seven of company's coal-fired units in Ohio by 2011. The consent decree resolved a lawsuit filed in 1999 under the New Source Review provision of the Clean Air Act.

Personnel
In August 2008, Michael J. Dowling was promoted from vice president of governmental affairs (lobbying) to vice president of communications of FirstEnergy. Dowling's previous experience includes lobbying and PR positions at Ohio Edison, as well as "leadership positions with the Edison Electric Institute, the Nuclear Energy Institute, the U.S. Chamber of Commerce and the National Association of Manufacturers."

Contact information
FirstEnergy Corp. 76 South Main Street Akron, Ohio 44308 Website:www.firstenergycorp.com

Related SourceWatch articles

 * Anthony J. Alexander
 * Ohio and coal
 * Pennsylvania and coal
 * United States and coal
 * Global warming
 * Nuclear energy
 * EPA Coal Plant Settlements

External articles

 * John Mangels and John Funk, "New Davis-Besse report making waves: Some raise questions as utility shifts stand on reactor lid rust hole," The Plain Dealer (Cleveland, Ohio), May 13, 2007.