FirstEnergy Corp. is optimistic about limiting the impact of the bankruptcy of subsidiary FirstEnergy Solutions on the parent corporation’s financial picture, according to slides to be presented today during a quarterly earnings presentation.
The slides were attached to a quarterly filing Tuesday with the U.S. Securities & Exchange Commission. It says FirstEnergy and its subsidiary — which owns three nuclear power plants in Ohio and Pennsylvania that are targeted for closure by 2021— are working diligently with creditors and other parties to ensure all debts are paid.
That optimism is tempered by an April 4 ruling by U.S. Bankruptcy Court Judge Alan Koschik in Ohio that the bankruptcy reorganization plan is too vague and lets FirstEnergy Corp. off the hook for cleanup costs of the four reactors if its subsidiary falls short. The proposed reorganization called for separating FirstEnergy Solutions and FirstEnergy Nuclear Operating Corp. (FENOC) from FirstEnergy Corp, which included shielding the parent corporation legally and financially from many of the bankrupt subsidiaries’ creditors.
The FirstEnergy corporate family is currently working on a revision of that rejected plan.
FirstEnergy Corp announced late Tuesday revenue of $2.9 billion for the first quarter of 2019, compared to $2.9 billion for the same time in 2018. That translated to $315 million in earnings, or $0.59 per basic share, in the latest quarter, compared to $1.2 billion in earnings, or $2.55 per basic share, in the same period of 2018. The drop in earnings was due to ripple effects from FirstEnergy Solutions’ bankruptcy and efforts to separate it and FENOC from FirstEnergy Corp. according to a Tuesday press release.
FirstEnergy has sought assistance from federal and state governments to help keep the power plants afloat. State legislation filed this year in Pennsylvania is intended to help prop up FirstEnergy’s Beaver Valley plant and the Three Mile Island facility operated by Exelon. Legislation is reportedly being prepared in Ohio as well, after a 2018 bill that would have allowed FirstEnergy to raise power rates to help the Davis-Besse and Perry reactors never made it out of committee.