Energy News Network: Illinois Pollution Board Proposes New Emissions Rules in Dynegy Coal Saga

Illinois pollution board proposes new emissions rules in Dynegy coal saga

By Kari Lydersen

The Illinois Pollution Control Board is taking public comments on an amended emissions rule for Dynegy’s coal plants in the state.

Last year, the pollution control board had put forth rules written by the Illinois EPA with much input — even line edits — from Dynegy itself, as emails and documents obtained by environmental groups showed.

Clean air advocates say the new proposed rules are better than those earlier ones but still do not do enough to limit pollution from the aging coal plants.

“They are lower than what Illinois EPA was proposing and lower than what Dynegy is asking for, but still significantly higher than what the company has emitted in recent years,” said James Gignac, lead Midwest energy analyst with the Union of Concerned Scientists.

The company Vistra, which acquired Dynegy this year, released a statement saying it supports the pollution control board’s proposal, which includes stricter emissions caps than those previously recommended but keeps intact what’s known as a mass-based approach, in which the company gets a flat, fleet-wide cap instead of one based on the amount of power generated, or a rate-based approach. The proposal also includes a measure ardently backed by clean air advocates: that when a plant closes or is “mothballed,” the emissions it had been allowed be removed from the total cap.

Clean air advocates say they feel they are now in a waiting game, with much hanging on the public comment period and how the board responds to comments, including whether it makes total emissions caps for the plants stricter.

Dirty and clean plants

Opponents of the mass-based approach fear it will let Dynegy continue running or ramp up its dirtier coal plants, while potentially closing or ramping down cleaner plants that are more expensive to run.

“Any plant under a mass-based approach can pollute more and another one can pollute less — it still means an older plant with less pollution control can up its emissions,” said Toba Pearlman, staff attorney for the Natural Resources Defense Council. “[The recent proposal] is probably good for Vistra and bad for the people that live around the plants… We do think this is part of a larger strategy for Dynegy to squeeze Illinois for more money on their plants.”

The NRDC and Sierra Club in May released a report showing that Dynegy’s coal plants could close without affecting Illinois’ energy supply, noting the plants’ output could be replaced with renewable energy.

Vistra’s statement praised the latest proposal for allowing the company “the flexibility to assess and optimize its fleet of power plants to compete in the market.” It added that while Vistra’s subsidiary Luminant, which controls the plants, “supported the IEPA proposal, the company believes the IPCB proposal to be thoughtful and reasonable. Luminant will work constructively through the remainder of the process and looks forward to fully implementing the new standards.”

Dynegy acquired the five plants in 2013, with then-owner Ameren practically paying the company to take them off its hands. Since then Dynegy has worked on multiple fronts to try to keep the plants profitable, including a failed attempt to include supports in the 2016 Future Energy Jobs Act and an ongoing effort to change capacity market structures or switch markets, along with pushing for less stringent pollution requirements.

Howard Learner, executive director of the Environmental Law & Policy Center, noted that the pollution limits being amended have been on the books for a decade.

“They had plenty of time to adjust and retrofit their plants to come into compliance,” he said. “When Dynegy bought those plants, they knew what the standards were. And when Vistra bought Dynegy, they knew…but when the deadline came, they turned to a backroom deal.”



Crain’s Chicago Business: Keep Dynegy’s Downstate Coal Plans Open? New owner Vistra may have other ideas.

by Steve Daniels

When Dynegy, Illinois’ second-largest power generator, and the Rauner administration collaborated last year on a proposal to ease the state’s limits on emissions from the company’s coal-fired plants, the idea was to keep those financially pressured facilities open. Roughly a month after that, in late October, Dynegy announced a deal to sell to fellow Texas-based power company Vistra Energy. Now Vistra’s CEO is talking about closing Illinois plants even if the pollution-control changes are made.

So is the Rauner administration having second thoughts? No. It continues to support the changes, which are pending before the Illinois Pollution Control Board. That panel will hold hearings this month and is expected to act by summer.

Environmentalists harshly criticized the changes when they were unveiled last year. They said the new rules would permit Houston-based Dynegy to close facilities with costly pollution-control equipment in favor of running dirtier plants that are cheaper to operate.

Dynegy and the state countered that the new rules were designed to provide operational flexibility that the current ones don’t. But then, in late February, comments by Vistra CEO Curtis Morgan about Dynegy’s downstate fleet raised questions about whether the enviros had a point. Once the environmental rule changes “free up the assets,” he told analysts Feb. 26, “we’ve got a portfolio optimization exercise to do no different than what we did in Texas. And I think that may result in maybe shrinking the size of our generation. Whether that means we’re trying to sell assets or what, I don’t know yet.”

Late last year, Irving, Texas-based Vistra announced it would close three large coal-fired plants in Texas—removing more than 4,000 megawatts of capacity and eliminating about 850 jobs.

A Vistra spokesman says Morgan has no further comment while the Dynegy acquisition is pending. Federal regulatory approval came April 4, and the deal is now slated to close April 9, Vistra disclosed in an April 5 filing.

Dynegy’s eight downstate coal-fired plants generate up to 5,476 megawatts—enough power for 5 million homes or more—and employ about 1,000. Four of the eight plants have “scrubbers,” expensive systems that remove much of the sulfur from emissions.

Dynegy CEO Robert Flexon has pressed Illinois policymakers to provide relief in various forms. He also opposed in vain a 2016 state law that provided $235 million of yearly subsidies over a decade to rival Exelon to keep two nuclear plants open, including one in Clinton that competes directly with his downstate plants.

“I hate shutting anything down,” Flexon says in an interview. “We’re in the business of generating power. The impact (shutdowns) have on communities and your own employees—we do everything we can not to shut down a plant.”

He says Dynegy has hired business consultancy McKinsey to help find efficiencies to maintain the fleet. He says Vistra has committed to keep McKinsey on, which he says indicates a desire to keep plants open.


Another issue undermining Dynegy’s case for looser environmental restrictions is that its downstate Illinois operations remain profitable on a cash-flow basis. Company executives have told the Illinois Pollution Control Board that downstate Illinois is posting operating losses. That’s true on paper, but it’s only because Dynegy has written down the value of its plants to the tune of nearly $900 million in the past two years. Those are noncash write-downs. Leave those out, and downstate has produced free cash flow of more than $100 million in each of the past two years, according to Securities & Exchange Commission filings.


Chicago Sun-Times Editorial: Don’t send more air pollution to Chicago

EDITORIAL: Don’t send more air pollution to Chicago
October 18, 2017
Sun-times Editorial Board

Last year, Illinois enacted a farsighted law designed to provide cleaner air, more jobs and lower energy bills. Now, a company that owns coal-fired power plants in Illinois is pushing to weaken clear-air rules in a way that would undermine those goals. The Illinois Pollution Control Board should take a deep breath and refuse to go along.

Weaker regulations, in this case, would be a big step backward. The state’s air, including in Chicago, would get dirtier and the transition away from coal would be detoured.

Last year, stakeholders ranging from environmentalists to utilities laboriously hammered out an agreement that resulted in the Illinois Future Jobs Act, a law designed to improve residents’ health and make Illinois a leader in renewable energy — all while reining in utility bills.

Since then, however, two utilities have engaged in what amount to counterattacks.

First, the Downstate utility Ameren, which supplies gas and electricity to central and southern Illinois, persuaded the Illinois Commerce Commission to let it lower its energy efficiency goals.

Now Dynegy, which owns eight coal-fired power plants in central and southern Illinois, wants the Illinois Pollution Control Board to scrap the limits on the rate of pollution each of its plants can emit. Dynegy, which also is reportedly seeking rate increases in the Legislature, proposes instead that existing annual caps apply to its plants as a group, which would allow it to give its dirtier plants more leeway to belch out soot and other pollutants that cause smog and acid rain.

The proposal comes as Dynegy faces a deadline that Ameren, which previously owned the plants, agreed to in 2006 to reduce air pollution.

In a classic example of the problems with revolving-door government, Dynegy has worked with Gov. Bruce Rauner’s director of the Illinois Environmental Protection Agency — a former lobbyist for a trade association that represents Dynegy — to draw up the plan. According to Illinois Attorney General Lisa Madigan’s office, the revised pollution cap would provide a financial incentive for Dynegy to actually increase pollution if it chose.

For a hearing on Thursday, Dynegy is on the agenda with a request for the Illinois Pollution Control Board to rush through the decision-making process. But there is no need to rush. This is a matter that demands full input and careful consideration. Illinois does not face any shortage of power generation capacity.


Chicago Tribune: Pollution could increase as Rauner EPA moves to rescue coal plants

By Michael Hawthorne

September 27, 2017

In a move that could lead to dirtier air in Chicago and other downwind communities as far away as New York, Gov. Bruce Rauner’s administration is pushing to overhaul stringent limits on lung-damaging pollution from some of the last coal-fired power plants in Illinois.

Proposed amendments to state rules would scrap limits on the rate of pollution from a fleet of eight coal plants in central and southern Illinois owned by Dynegy Inc. Instead, the state would impose annual caps on tons of sulfur dioxide and nitrogen oxide emitted by the fleet — a subtle but significant change that could stall or reverse efforts to reduce Dynegy’s contributions to smog, soot and acid rain.

Drafted with extensive input from the company’s Chicago-based attorneys, the proposed pollution caps are significantly higher than what Dynegy’s fleet emitted during each of the past two years, according to a Tribune analysis of federal pollution data.

Alec Messina, director of the Illinois Environmental Protection Agency, said the goal is to keep the financially struggling coal plants open by giving Houston-based Dynegy more flexibility to operate individual generating units, several of which are not equipped with modern pollution controls. Before joining the Rauner administration, Messina worked as a lobbyist for a trade group that represents the company’s interests in Illinois.

State standards would still be tougher than federal requirements, Messina said, and company spokeswoman Meredith Moore noted emissions could still increase if the state’s rate-based limits were kept in place.

But if a state rule-making panel approves the proposed changes, expected to be formally introduced this month, the new limit on sulfur dioxide would be nearly double what Dynegy’s existing fleet emitted last year and higher than every year since 2012, according to the Tribune’s analysis. The cap on nitrogen oxide emissions would be 79 percent higher than what came out of the smokestacks in 2016.

In an Aug. 25 letter to the state EPA, Attorney General Lisa Madigan’s office questioned why the new regulations are necessary unless Dynegy plans to operate its dirtier coal plants more frequently and its cleaner plants less often.

The proposed pollution caps are set so high that the state would end up encouraging Dynegy to pollute more, Madigan’s office said.

“We want to make sure the public is getting the full benefit of the pollution standards the company agreed to meet,” James Gignac, Madigan’s environmental counsel, said in an interview. Changing the standard now could roll back years of progress, he said.

Dynegy also secured a provision that would keep the pollution caps fixed at the same amounts — 55,000 tons of sulfur dioxide and 25,000 tons of nitrogen oxide annually — even if it decided to shut down individual generating units or scuttle entire plants.

An EPA draft would have automatically tightened limits on Dynegy’s fleet to reflect plant closures, according to emails obtained by the nonprofit Environmental Law and Policy Center and shared with the Tribune. Chicago attorney Renee Cipriano, a former Illinois EPA director who represents Dynegy and other companies she once regulated, lined out or replaced language in the state’s draft, the emails show.

“We are making those types of tweaks to the rule language, so hopefully they address your issues,” Dana Vetterhoffer, an EPA attorney, responded in a May 31 email to Cipriano. “OK great,” Cipriano wrote back four minutes later.

Howard Learner, the environmental group’s president, said the changes would allow Dynegy to avoid installing pollution controls at its dirtiest plants and turn off the equipment at others.

“The company’s strategy is to run these plants on the cheap for as long as possible, like an old Chevy beater,” Learner said. “If the Rauner administration goes ahead with this, they’re effectively passing on the health costs of Dynegy’s pollution to the rest of Illinois and beyond.”

Moore, the Dynegy spokeswoman, said in an email to the Tribune that swapping the state’s current system for caps on the fleet’s emissions “would mean real environmental benefits.”

The EPA director echoed the company’s comments. “For the first time there is a cap on this fleet. That’s a big deal,” said Messina, who took over the state agency last year after serving as a top aide in Rauner’s office. He previously was a lobbyist for the Illinois Environmental Regulatory Group, an association that represents industries subject to state pollution regulations.



Greenwire: ELPC’s Dexter Says EPA’s Coal Ash Pond Hazard Disclosures Good But Don’t Go Far Enough


Coal Ash: Utility Filings Reveal Dump Conditions, EPA Compliance Plans
November 23, 2016
By Sean Reilly

When Dynegy Inc. released information about a coal ash storage pond at its Joppa, Ill., power plant, the resulting picture was unsettling: The pond had a “high hazard” ranking, meaning people could die in the event of a dike failure.

Papers submitted by the utility showed it also barely cleared a safety assessment and had no liner to protect groundwater.

But from a disclosure standpoint, the filings — required by U.S. EPA to be made public this month — represented a noteworthy development for watchdogs.

“It’s interesting to be able to get a glimpse into what has been a black box,” said Jessica Dexter, a staff attorney at the Environmental Law and Policy Center, a Chicago-based advocacy group that favors stricter oversight of coal ash.

Across the country, the newly released records are casting fresh light on the condition of hundreds of coal ash ponds and showing what utilities intend to do with the vast quantities of waste left over from coal-fired electricity generation.

In its disposal rule published last year, EPA gave companies two closure options: leaving the coal ash in place — after “dewatering” the ponds and capping the residue — or excavating the ash and possibly sending it to a landfill.

Read More


Midwest Energy News: ELPC & Allies Worry Regs for Dynegy’s Toxic Coal Ash Pits Won’t Protect Vermilion River


September 28, 2016

Long-Term Protection of Illinois River from Coal Ash Falls in Regulatory Gray Area
By Kari Lydersen

VERMILION RIVER MIDDLE FORK, ILLINOIS — As a persistent rain pelts the clear, swift Middle Fork of the Vermilion River on a mid-September day, the water swells and rises. Clumps of tree roots hang precariously over the river, exposed by the crumbly, receding banks. Where the bank is firmer, the water has carved out tiny caves.

This is Illinois’s only river to win the federal “Wild and Scenic” designation, and the way the water shapes and gouges the banks is exactly what wild rivers do, changing course and choosing different paths.

But this natural process could create a big problem on the Middle Fork of the Vermilion, because the flood plain that was historically the river’s playground contains 3.3 million cubic yards of toxic coal ash, stored in pits near a Dynegy coal-fired power plant that closed in 2011.

That proximity creates a potential risk that currently does not appear to be addressed by federal or state regulation.

Advocates are worried that erosion from the river could eventually collapse or puncture the man-made impoundments containing the coal ash, spilling it into a river that is a popular destination for tubing, paddling and fishing and runs through the nearby town of Danville, where a riverfront revitalization is underway.

The ash pits are adjacent to the Kickapoo State Recreation area, where campgrounds and trails were built on the site of a turn-of-the-century coal strip mine. The park’s website touts the “crystal clear ponds” where water filled pits from strip mining and the “luxuriantly forested ridges and hillsides” that are a testament to “the regenerative powers of nature” on 1,290 acres of mined lands purchased in 1939 from United Electric Coal Company.

Studies have shown the river hosts 57 types of fish, 45 types of mammals and 190 types of birds, with 24 of the species listed as threatened or endangered.

Advocates feel all this could be at risk if action is not taken to deal with the coal ash pits. But this issue seems to fall into a regulatory gray area. The coal ash impoundments currently meet state requirements for stability. Federal rules on coal ash storage do not apply to the site. And in general, regulations are unlikely to address future risk from the movement of the river.

So it will take public pressure and political will to drive proactive measures, as advocates see it.

Reinforcing the banks

In October, Dynegy is scheduled to begin constructing 485 feet of new reinforcements to a severely-eroding part of the riverbank outside its ash pits. Advocates see this as a necessary emergency step. But they feel like it only delays inevitable continued erosion, and they are demanding long-term protections – moving the ash to new, lined pits that could be built on Dynegy’s property farther from the river.

“This is a band-aid solution,” said Andrew Rehn, water resources engineer for the Prairie Rivers Network, about the planned fortifications. “We should take this moment to look at what we’re going to do in the long run.”

Dynegy spokesman David Onufer said that with the October work, “the intention is to reestablish the riverbank approximately 30 feet east of where it has eroded…We’ll install rocks, place soil, and transplant native vegetation to secure the new riverbank.”

Onufer continued that “Dynegy sees the Middle Fork Vermilion River as a huge natural asset for the state of Illinois and takes our responsibility for protecting it seriously….Registered professional engineers annually inspect the berms of the Vermilion ponds for structural stability. In addition, Dynegy routinely performs visual checks of site conditions. Riverbank restoration activities will be performed as necessary if significant river bank erosion is observed.”

Dynegy acquired the Vermilion coal-fired plant in 2000 with its purchase of the Illinois Power Company. Since its launch in the 1950s, the plant has stored coal ash onsite. In 2011 the plant closed, a victim of competition from cheaper natural gas-fired power and other factors driving the closing of coal plants nationwide.

Advocates are worried that if Dynegy isn’t forced to make major overhauls at the site in the near-term, it will end up completing its closure responsibilities, selling the land or deeding it to the state, and taxpayers will be on the hook for any future problems.

“With our state budget in the situation it is, why would officials not prioritize a solution that is paid for by the company?” asked Pam Richart, who along with her husband, Lan, ran an environmental consulting firm and then co-founded the advocacy group Eco-Justice Collaborative. “Dynegy knew about this situation when they bought the plant. It’s not a surprise.”

Onufer said the company “will consider selling the property to the state if they are interested in expanding the recreational opportunities in that area.”

Corrective action

Dynegy is currently drafting a Corrective Action Plan resulting from a notice of violation it received from the Illinois EPA in 2012 for polluting groundwater with metals from the coal ash. The plan includes installing caps on the ash pits to prevent rainwater from infiltrating and pushing contaminants down into the groundwater.

“Our timeline is dependent on IEPA approval, so we are in a holding pattern and not legally allowed to implement corrective actions until we hear back,” said Onufer. “The IEPA is currently working on new ash pond closure rules, so it seems unlikely they will act on Dynegy’s proposal until after those new rules are completed.”

Advocates lament the slow process, and also that the corrective action deals only with groundwater, and doesn’t directly address the future stability of the impoundments. They also posit that caps will do nothing to stop groundwater running through the ash pits from the higher natural slopes on the opposite side of the impoundments. And they worry the weight of a cap could even make the impoundments more vulnerable to collapse in the future. The fact that parts of the ash pits are built over former underground mine shafts are also a concern.

Onufer said that there are no wells drawing on groundwater for drinking water within nearly half a mile of the pits, and he said that no adverse effects on the river have been found.

Last year federal rules were adopted – after a long, contentious process – governing the storage of coal ash. But those rules do not apply to closed plants. Illinois is in the process of adopting state rules on coal ash that essentially mirror the federal rules. Advocates are pushing for the state to include a provision covering closed coal plants.

But even if the state adopts rules applying the federal provisions to closed coal plants, it would not necessarily address the concerns about the river threatening the impoundments at Vermilion.

“Without rules [applying to closed sites] there’s this piecemeal process of looking at it,” said Jessica Dexter, a staff attorney with the Environmental Law & Policy Center. “If you just look at it through the groundwater lens, will that solve the risk to the river? For plants not subject to federal rules, there’s very little in the proposed state rule that would create standards for what they need to do. As to Vermilion, we need a solution that gets the coal ash out of the river’s way.”

Read More at http://midwestenergynews.com/2016/09/28/long-term-protection-of-illinois-river-from-coal-ash-falls-in-regulatory-gray-area/

Litigation Victory! Federal Court Finds that Dynegy’s Edwards Coal Plant Violates Law on Particulate Pollution and Opacity

Victory! ELPC and our partners won a major victory as Federal District Court Judge McDade just issued a very favorable decision granting us summary judgment in our lawsuit challenging excessive particulate emissions, which exacerbate respiratory problems, from the old Edwards coal plant near Peoria, IL. The Court’s opinion holds that a Dynegy subsidiary, the plant owner, violated the Edwards coal plant’s operating permit thousands of times over seven years – emitting an illegal amount of harmful soot pollution.

ELPC attorneys Jenny Cassel and Justin Vickers represent client plaintiffs Respiratory Health Association and Sierra Club, and we are working with co-plaintiff Natural Resources Defense Council. Together, we alleged that the Edwards coal plant was not properly controlling soot pollution – also known as “particulate matter,” which is associated with asthma, decreased lung function, and other respiratory problems.

This important legal victory reinforces the ability of environmental advocacy organizations to bring and win citizen enforcement lawsuits against polluters, even when state agencies do not enforce the permits they issue. It’s time for Dynegy to recognize that if it is going to continue to operate the Edwards plant, it must follow the law by installing sufficient modern pollution control equipment.

Going forward, the case will shift to a “remedy” phase for the Judge to determine what steps Dynegy must take to reduce pollution and comply with its permit, as well as what penalties should be paid for violations.

Kudos to ELPC attorneys Jenny Cassel and Justin Vickers and our partners who all worked hard on this case. This court decision will reduce pollution and set a precedent for environmental enforcement lawsuits brought in the public interest.

Midwest Energy News: ELPC’s Dexter Warns IL Needs Tougher Rules for Toxic Coal Ash Ponds

Groups seek stronger safeguards in Illinois coal ash rules

By Kari Lydersen

The Vermilion Middle Fork is a swift-flowing river winding through lush forests, rolling prairie and craggy cliffs in central Illinois. Designated as one of the country’s “National Scenic Rivers,” it is subject to federal and state protections, popular with paddlers and home to wildlife including 24 endangered or threatened species.

But the river’s banks butt up against three massive pits filled with toxic coal ash produced over five decades by the Vermilion coal-fired power plant, which closed in 2011 and is still owned by the power company Dynegy. The pits hold more than 3.3 million cubic yards of coal ash, enough to fill an Olympic-sized swimming pool more than 1,000 times.
In some spots, dark orange run-off drips into the Vermilion, as documented by canoeing environmental watchdogs who note that such iron-rich runoff is common from coal ash impoundments. The river’s banks also show obvious signs of erosion, and as the soft earth recedes it brings the river closer to the vast reserves of coal ash.

Local residents and environmental advocates fear that the Vermilion could become the site of a disaster akin to those in Kingston, Tennessee or the Dan River in North Carolina, where coal impoundments failed and inundated nearby waterways and towns with toxic sludge.

Two sets of rules

In October, long-awaited federal rules governing the storage of coal ash took effect. But the rules do not apply to ash stored at power plants that were already closed, hence the impoundments next to the Vermilion River are not covered.

The state is in the process of drafting its own rules on coal ash storage.

The Illinois Environmental Protection Agency (IEPA) started this process several years ago, and after discussions between industry and environmental stakeholders, it came up with a draft that environmental advocates said was decent if not ideal.

But the agency halted that process to see how the federal rules played out. After those rules were finalized, the Illinois Pollution Control Board ordered the IEPA to submit its proposed rules.

This time, the state agency — under the new administration of Gov. Bruce Rauner — submitted proposed rules far less stringent and comprehensive than the previous draft. The proposed rules currently before the board cover six pages, while the earlier draft was around 50 pages.


ELPC Statement on Dynegy Coal Plant Closures

For Immediate Release
May 3, 2016
David Jakubiak

Environmental Law & Policy Center Statement On
Dynegy Coal Retirements in Central, Southern Illinois

Executive Director, Environmental Law & Policy Center

“Dynegy’s management made a business decision to shut down old coal plants that are not economically competitive in the power market. Dynegy appears to now be asking Illinois legislators to force consumers to pay higher utility bills to subsidize Dynegy’s old, uncompetitive power plants. That’s just not fair. Illinois legislators should advance policies to support investment in the new clean energy technologies that keep electricity costs affordable while creating new jobs and spurring economic growth.

“Illinois has a surplus of old nuclear and coal plant supply while demand is declining due to smart energy efficiency that saves money for businesses at home. Natural gas and new wind power are outcompeting the old coal and nuclear plants, and they are saving consumers’ money. Illinois policymakers should not force consumers to pay higher utility rates to subsidize old plants they’ve already paid for.”

Midwest Energy News: ELPC Questions FirstEnergy’s Withholding of Documents, More Opposing Voices Join the Chorus

That proposal followed a commitment made two weeks ago by Chicago-based Exelon Corporation to provide the same amount of energy for $2 billion less with resources whose emissions would be 100 percent carbon-free.

“Dynegy agrees with Exelon that this process should be competitive,” Dynegy president and CEO Robert Flexon said in a prepared statement when his company’s plan was announced on Tuesday.

“We believe the counter-proposals are uniformly better for Ohio consumers and businesses than the AEP and FirstEnergy [plans], keeping and creating jobs in the state that stimulate economic growth and development rather than weakening Ohio’s competitive position,” Flexon added. “We ask for serious consideration from the PUCO and Ohio elected and state officials for our proposals.”

Meanwhile, additional information questioning the plan has been produced and filed by grid operator PJM Interconnection.

“The business case against the bailout has become particularly stronger” as a result, said Dick Munson of the Environmental Defense Fund, which also opposes FirstEnergy’s plan.

Limited information

FirstEnergy’s revised plan would have its regulated utilities buy all the output from the Davis-Besse nuclear plant, the W.H. Sammis coal plant, and FirstEnergy’s share of power from two 1950’s era coal plants.

The utilities would resell the electricity in the competitive market, and distribution customers would pay any shortfall or get a credit for the difference between the resale price and the contract price. That price includes a guaranteed rate of return for FirstEnergy Solutions.

The proposed settlement that was filed last month would shorten the term to eight years instead of the original 15. Yet even the revised plan would boost a typical residential customer’s bill as much as $130 per year, according to the Office of the Ohio Consumer’s Counsel (OCC).

The settlement “taken as a whole, does not provide a net benefit to customers, is not in the public interest, and should be rejected by the PUCO,” said expert witness Matthew Kahal in supplemental testimony filed on December 30.

Under the settlement, FirstEnergy would also assume a small share of the potential downside to consumers, reinstate the energy efficiency programs it suspended after 2014, and make other changes.

Critics say some of those provisions could lead to additional changes that would increase consumers’ costs. One example is a section that would raise the fixed costshare of the bill for electricity distribution and could also discourage energy efficiency.

Similar concern focuses on provisions in the settlement for grid modernization.

Some programs that fall into that general category “may have benefits for customers,” said Rob Kelter of the Environmental Law & Policy Center (ELPC), which is among the parties who oppose the settlement. “But there’s also a lot of expense involved.”

Yet FirstEnergy has refused to produce documents about the details of the plans for grid modernization. The company claims no final versions exist and says any drafts are protected as attorney work product. It has also refused to provide supporting materials sought in follow-up requests, saying those were too broad or came later.

“Their plan may not be final yet, but we want documents that indicate what they intend to do. And that’s what discovery is all about,” Kelter said. “You don’t get to pick and choose what you want to give up to the other side.”

The big concern is that approval of the settlement might later be interpreted as “some type of preliminary permission” for whatever FirstEnergy might later submit—without the benefit of a full review beforehand, Kelter explained.

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