| FirstEnergy Corp. | |
| Type: | Public |
| Location: | Akron, Ohio, U.S. |
| Key People: | Brian X. Tierney, CEO [1] |
| Area Served: | 6 million customers within 65000sqmi of Ohio, Pennsylvania, West Virginia, Maryland, and New Jersey (as of June, 2012) |
| Industry: | Electric Utility |
| Products: | Electricity generation, transmission and distribution, energy management, other energy-related services |
| Revenue: | US$12.90 billion (2023)[2] |
| Operating Income: | 2.162 billion (2020) |
| Net Income: | 1.123 billion (2023) |
| Assets: | US$44.464 billion (2020) |
| Equity: | $7.237 billion (2020) |
| Num Employees: | 12,153 (2020) |
FirstEnergy Corp. is a privately owned electric utility headquartered in Akron, Ohio. It was established when Ohio Edison merged with Centerior Energy in 1997. Its subsidiaries and affiliates are involved in the distribution, transmission, and generation of electricity, as well as energy management and other energy-related services. Its ten electric utility operating companies comprise one of the United States' largest investor-owned utilities, based on serving 6 million customers within a 65000sqmi area of Ohio, Pennsylvania, West Virginia, Virginia, Maryland, New Jersey, and New York.[3] Its generation subsidiaries control more than 16,000 megawatts of capacity, and its distribution lines span over 194,000 miles. In 2018, FirstEnergy ranked 219 on the Fortune 500 list of the largest public corporations in the United States by revenue.[4]
In November 2016, FirstEnergy made the decision to exit the competitive power business and thus become a fully regulated company.
On July 21, 2020, Speaker of the Ohio House of Representatives, Larry Householder, former Ohio Republican Party Chairman Matt Borges, and three others were accused of accepting $60 million in bribes from FirstEnergy in exchange for $1.3 billion worth of benefits in the form of Ohio House Bill 6, as part of what became known as the Ohio nuclear bribery scandal. The stock price of the company plummeted within hours of the arrests being made. On July 22, 2021, the U.S. Attorney for the Southern District of Ohio announced that FirstEnergy would be fined $230 million for their part in the scandal. This was the largest criminal fine ever collected by the Southern District.[5]
Ohio Edison Company (formerly OEC on the NYSE)[6] was a publicly traded holding company that began in 1930 from the consolidation of 200 electric companies. By 1950, it ended up with two utility operating companies, Pennsylvania Power and Ohio Edison. It continued in existence until 1997, when its merger with Centerior formed FirstEnergy.
Centerior Energy Corporation (formerly CX on the NYSE) was formed in 1986 from the affiliation of two public utilities. Centerior was based in Independence, Ohio and existed as a publicly traded holding company for ten years until its merger with Ohio Edison formed FirstEnergy in 1997:
General Public Utilities (formerly GPU on the NYSE) was a publicly traded utility holding company in Parsippany, New Jersey. In 1996, the company was reorganized and renamed GPU, Inc. Also in 1996, it formed a new division, GPU Energy, which became the holding company for GPU’s three utility operating companies:
In 2001, FirstEnergy, with its four utility operating companies, merged with GPU, Inc., folding GPU's three additional operating companies into FirstEnergy.
Through the 2001 acquisition of GPU, FirstEnergy also acquired MYR Group (formerly MYR on the NYSE), a subsidiary that GPU had created as a publicly traded company in the 1996 reorganization. MYR Group’s services included installing and maintaining utility power lines and cellular telephone communications towers.[10]
GPU is best known as the former owner of the Three Mile Island nuclear plant. In 1989, Standley H. Hoch, a former executive with General Dynamics, became the CEO of GPU. Hoch had two main goals: cut costs and fight to repeal the Public Utility Holding Company Act of 1935, which made it difficult for utilities to operate across state lines.[11]
See main article: Allegheny Energy. Allegheny Energy was an electric utility serving customers in Pennsylvania, West Virginia, Virginia, and Maryland. Its regulated subsidiaries were West Penn Power (serving Southwestern and Central Pennsylvania), Monongahela Power (a.k.a. "Mon Power", serving Northern and Southern West Virginia), and The Potomac Edison Company (western and central Maryland, parts of eastern West Virginia, and northern Virginia). The electric generating plants were operated by subsidiary Allegheny Energy Supply Company and Monongahela Power.
Before the formation of Allegheny Energy, the holding company was known as Allegheny Power System which had the three utility operating units. The brand name Allegheny Power was used on customer bills, trucks and company equipment starting in 1996. In 1997, the company attempted to merge with Pittsburgh-based Duquesne Light Company. The merger was withdrawn by both parties, and the companies did not merge. In 1999, Allegheny Power purchased the West Virginia operations of UtiliCorp United's West Virginia Power. UtiliCorp purchased Virginia Electric and Power Company's (present day Dominion Resources) West Virginia service area in 1986 and renamed the acquired service area as West Virginia Power.
In February 2010, Allegheny Energy announced plans to merge with FirstEnergy. The merger was approved by stockholders of both companies, by the Federal Energy Regulatory Commission, and by the regulatory commissions in Virginia, West Virginia, Maryland, and Pennsylvania. The merger finalized when the Pennsylvania Public Utilities Commission approved the merger on February 24, 2011. The merger officially closed on February 25, 2011.[12] The merger did not include Allegheny's service area in Virginia, which was purchased in 2010 by the Shenandoah Valley Electric Cooperative and the Rappahannock Electric Cooperative.
After the merger with Allegheny Energy, FirstEnergy was the largest investor-owned electric utility in the country (based on customers served) for a short period, before the Exelon/Constellation and Duke Energy/Progress Energy mergers.[13]
FirstEnergy was formed on November 7, 1997, when Ohio Edison acquired Centerior Energy and its subsidiaries for $1.6 billion in stock.[14] The company was acquired with plans for a restructuring and layoffs to cut costs.[14] [15] That same month the Public Utilities Commission of Ohio (PUCO) initiated an investigation into the reliability of FirstEnergy's energy transmission in the context of possible plant shutdowns and prior problems with Centerior.[16]
In 2001, FirstEnergy merged with GPU, Inc., the owner of Jersey Central Power & Light Company, Pennsylvania Electric Company (Penelec), and Metropolitan Edison Company (Met-Ed).[17]
FirstEnergy later merged with Greensburg, Pennsylvania-based Allegheny Energy in 2011.[18]
FirstEnergy Services Corp. was incorporated on August 8, 1997 with the primary purpose of providing intracompany services, such as operation of subsidiary generation companies and financial transactions.[19] It underwent several mergers and fictitious name filings beginning with its first filed merger on March 31, 1998.[20] As of September 1, 2001, FirstEnergy Services Corp. became FirstEnergy Solutions Corp.[21]
On March 31, 2018, FirstEnergy Solutions Corp. filed for bankruptcy. FirstEnergy Solutions Corp. was a member of FirstEnergy Generation, LLC–itself a generation subsidiary of FirstEnergy Corp.–while FirstEnergy Corp. itself remained solvent.[22] The case has been closely watched as it could have significant implications for the U.S. power sector. For instance, the U.S. Bankruptcy Court for the Northern District of Ohio has asserted its primacy over the Federal Energy Regulatory Commission (FERC) relating to some of FirstEnergy Solutions Corp.’s FERC-regulated power purchase agreements.[23] [24]
FirstEnergy Solutions Corp. filed its eighth amended bankruptcy plan on October 14, 2019. In 2020, it emerged from bankruptcy. The company’s post-bankruptcy fate was two-fold. First, the company incorporated in Delaware under the name Energy Harbor Corp. and has since continued to operate in Ohio under the same name. For legal purposes, Energy Harbor Corp. is registered in Ohio as a foreign entity.[25] [26] Secondly regarding post-bankruptcy fate, FirstEnergy Solutions Corp. has also continued its existence as an actively chartered Ohio company, but this is only on paper rather than in practice: that entity does not conduct any business.
In March, 2018, FirstEnergy announced the closure of Perry Nuclear Generating Station and Davis–Besse Nuclear Power Station, both in Ohio and the closure of Beaver Valley Nuclear Power Station in Pennsylvania.[27] This was followed in August, 2018 with the announcement of the closure of two coal-fired plants, the W.H. Sammis Power Plant in Stratton, Ohio and the Bruce Mansfield Power Plant in Shippingport, Pennsylvania by June 2022.[28]
However, the closure of the Perry, Davis–Besse, and Sammis plants were rescinded in July, 2019 when the State of Ohio passed and signed into law a subsidy to support the Perry and Davis–Besse nuclear plants.[29]
See main article: Ohio nuclear bribery scandal. On July 21, 2020, Speaker of the Ohio House of Representatives, Larry Householder, former Ohio Republican Party Chairman Matt Borges, and three others were accused of accepting $60 million in bribes from FirstEnergy in exchange for $1.3 billion worth of benefits in the form of Ohio House Bill 6, which increased electricity rates and provided that money as a $150 million per year bailout for the two above-mentioned nuclear plants (Perry and Davis–Besse).[30] The stock price of the company plummetted within hours of the arrests being made. FirstEnergy denied involvement in the charges.[31] State legislators quickly announced plans for a bill to repeal H.B. 6.[32] [33] Several organizations called on the Ohio Attorney General to begin revoking the charter of FirstEnergy.[34]
On October 29, 2020, The Independent Review Committee of the Board of Directors of FirstEnergy Corp. announced a leadership transition, including the termination of the company's Chief Executive Officer, Charles E. Jones, effective immediately. FirstEnergy also announced on the same day the termination of two other executives: its Senior Vice President of Product Development, Marketing, and Branding; and its Senior Vice President of External Affairs, effective immediately.[35] During the course of the company's previously disclosed internal review related to the government investigations, the Independent Review Committee of the Board determined that these executives violated certain FirstEnergy policies and its code of conduct.Concurrently, Steven E. Strah, President of FirstEnergy, has been appointed Acting Chief Executive Officer, effective immediately.[1]
On July 22, 2021, Vipal J. Patel, Acting U.S. Attorney for the Southern District of Ohio, announced that FirstEnergy would be fined $230 million for its part in the scandal.[5]
The bribery scandal ended up also affecting the company's major naming rights deal with the Cleveland Browns for FirstEnergy Stadium, which was originally to run from 2013 through the end of the 2029 NFL season.[36] The Cleveland city council passed a resolution in June, 2022 to urge FirstEnergy to relinquish the rights.[37] At the time, the Browns nor FirstEnergy motioned that the agreement would be revoked.[38] The Browns then announced on April 13, 2023 that the team and FirstEnergy had come to an agreement to immediately terminate the naming rights deal, restoring the name of the venue to Cleveland Browns Stadium.[39]
During the COVID-19 pandemic in March, 2020, the company stopped power shutoffs and restored connections for those whose power had been terminated because of non-payment. They also requested that customers who were facing hardship paying their utility bills contact the company to set up alternate payment programs, energy assistance programs or other energy arrangements, based on the customer's ability to pay. This included customers of all ten FirstEnergy utility companies in its entire six state footprint.[40]
FirstEnergy announced its intent in November, 2016 to exit the competitive businesses while staying in the regulated businesses and also to become a fully regulated company during the following 18 months.[41] FirstEnergy Solutions Corp., the company's then-competitive subsidiary, managed 13,000 MW of generating capacity and was a leading energy supplier serving residential, commercial and industrial customers in the Northeast, Midwest and Mid-Atlantic regions. It was anticipated that some generating units would be sold and that others would be shut down. Robert E. Murray, CEO of Murray Energy, warned in August, 2017 that FirstEnergy Solutions Corp. was in danger of bankruptcy if the White House would not issue an emergency order to open coal-fired plants.[42] [43] The Federal Energy Regulatory Commission (FERC) unanimously rejected a United States Department of Energy (DOE) Notice of Proposed Rulemaking (NOPR) to subsidize coal and nuclear plants in January, 2018.[44] FirstEnergy Solutions Corp. filed for Chapter 11 bankruptcy on March 31, 2018.[45] As a result of the bankruptcy, FirstEnergy Solutions Corp. sought federal intervention of invoking Section 202(c) of the Federal Power Act to keep their plants operating.[46]
In February, 2018, FirstEnergy announced plans to deactivate or sell Pleasants Power Station in West Virginia.[47] In March, 2018, FirstEnergy announced plans to deactivate or sell the Beaver Valley, Davis-Besse, and Perry nuclear power plants, which are in the Ohio and Pennsylvania deregulated electricity market, during the next three years.[48]
FirstEnergy's electric generation is primarily from coal and nuclear power plants, but also includes natural gas, oil, and hydroelectric power plants.
A 2017 report conducted by the University of Massachusetts Amherst placed FirstEnergy 9 out of the top 100 of the country's largest greenhouse polluters.[49]
In 2008, FirstEnergy was required to pay US$1.5 billion by 2011 as part of a settlement to end a lawsuit filed by the United States Environmental Protection Agency. This lawsuit alleged that the company failed to install pollution control equipment when upgrading its coal burning plants. Also as part of the settlement, major pollution control equipment is now being installed at the FirstEnergy Sammis generation plant and at other sites. This lawsuit was one of the New Source Review lawsuits filed in the 1990s.[50]
To provide cleaner energy to its customers, FirstEnergy took several important steps in 2009. First, the company announced plans in April to repower Units 4 and 5 at its R.E. Burger Power Station in Shadyside, Ohio, to generate electricity principally with biomass, the only base load renewable source that can displace coal emissions.[51] Furthermore, FirstEnergy hosted a 1 MW pilot plant test of carbon capture retrofit equipment for carbon sequestration on one of the remaining coal units at R.E. Burger.[52] In September, 2009, FirstEnergy decided to complete construction on the Fremont Energy Center, a 707 MW peaking plant powered by natural gas by the end of 2010.[53] Its final step of the 2009 plan started in November, 2009, wherein FirstEnergy purchased the rights to develop a compressed air electric generating plant in Norton, Ohio, which Ohio Governor Ted Strickland praised as "an example of how we can leverage technology and our natural resources to grow our economy and ensure our energy future." The Norton project, part of the company's overall climate change strategy, has the potential to be expanded to up to 2,700 MW of capacity—the largest in the world by far. According to the Electric Power Research Institute, "a compressed-air energy storage project of this size...could be a key component in integrating large-scale intermittent renewables (such as wind) onto the nation's grid system."[54] Together, these projects, when completed, will further reduce the utility's emissions of, which has since shrunken to about one-third below the regional average.
FirstEnergy Solutions Corp. has given renewable energy certificates to help balance out the amount of electricity used in Earth Day events that were held at nine post-secondary education locations in Maryland, New Jersey, Ohio, and Pennsylvania. Each of the schools received five SmartWind REC's, representing capacity sufficient to light a large building for the entire day.[55]
In 2008, Ohio lawmakers mandated energy efficiency after finally agreeing with then-Gov. Ted Strickland after months of debate to pass a law requiring electric utilities to help customers use less electricity every year. The goal was to reduce use to 22 percent less by 2025 than they did in 2009. Under the 2008 law, FirstEnergy surcharges companies that do not invest in energy efficiency. However, industries that use their waste heat to make power could avoid that rate increase.[56]
As of November 29, 2012 FirstEnergy Corp. has abandoned its behind-the-scene lobbying campaign to persuade lawmakers to gut a four-year-old law requiring utilities to help customers use less electricity by switching to energy efficient equipment and lighting.[57]
Several cases have been brought against FirstEnergy for its dumping of coal waste into Little Blue Run Lake in West Virginia and Pennsylvania.[58] [59] [60] FirstEnergy has dumped more than 20 billion gallons of coal ash and smokestack scrubber waste into the body of water which has contaminated local water supplies with arsenic, sulfates, sodium, calcium, magnesium and chloride.[60]
A July, 2012 consent decree from the Pennsylvania Department of Environmental Protection forces FirstEnergy to close the Little Blue Run Lake, which is an unlined waste impoundment in Beaver County, Pennsylvania and Hancock County, West Virginia. FirstEnergy had piped coal ash waste slurry from its Bruce Mansfield Power Plant since 1974. The reservoir at Little Blue Run is the country's largest coal ash impoundment. Pollutants including sulfates, chlorides, and arsenic have been found in groundwater nearby. Per the consent decree, FirstEnergy must stop dumping coal ash at the site by 2016, pay a penalty of $800,000, provide clean water to local residents, and monitor the environment for signs of seeps for toxic pollutants including selenium, boron and arsenic.[61] [62]
Charles E. Jones was the president and chief executive officer of FirstEnergy Corp. from 2015 until his termination on October 29, 2020.
Steven E. Strah was named acting chief executive officer of FirstEnergy on October 29, 2020. Steven E. Strah decided to retire on September 16, 2022.
John Somerhalder served as interim CEO of FirstEnergy between September 17, 2022 and June 1, 2023.
On March 27, 2023, FirstEnergy Corp. announced Brian X. Tierney, a former executive at American Electric Power, as President and CEO of FirstEnergy Corp. His role became effective June 1, 2023.