A federal bankruptcy judge in Akron, Ohio, has set an April 16 hearing on whether FirstEnergy Solutions should be held to $765 million worth of contracts as it seeks Chapter 11 protection.
Judge Alan Koschik granted FirstEnergy Solutions a temporary injunction Monday in U.S. Bankruptcy Court in the Northern District of Ohio to prevent the Federal Energy Regulatory Commission from enforcing 10 outstanding contracts until further litigation determines whether the struggling electrical power corporation will have to honor them. Eight of those 10 contracts are for wind and solar power, which the corporation entered between 2003 and 2011. That was when the economics for renewable energy contracts were more viable than they are today, according to FirstEnergy’s bankruptcy filings.
A pre-hearing status conference is set for April 9.
FirstEnergy Solutions filed for bankruptcy on Saturday, three days after it announced it would close its four nuclear power reactors in Ohio and Pennsylvania in the coming years if it does not receive rapid assistance from the federal and state governments.
The four reactors are the 908-megawatt Davis-Besse Nuclear Power Station at Oak Harbor, Ohio; the 1,268-megawatt Perry Nuclear Power Plant at Perry, Ohio; and two reactors at the Beaver Valley Power Station north of Pittsburgh that total 1,872 megawatts. Davis-Besse’s closure is scheduled for May 2020, followed by the Perry plant in May 2021, and the two Beaver Valley reactors in May and October 2021.
The four reactors’ operations licenses from the U.S. Nuclear Regulatory Commission are not scheduled to expire until different times between 2026 and 2047. FirstEnergy Solutions faces financial problems including low wholesale electricity prices, weak demand, cash flow issues, and debts. Late last week, FirstEnergy Solutions requested federal and state financial help to keep it afloat.
FirstEnergy Solutions, a wholly owned subsidiary of Akron-based FirstEnergy Corp., has $7.241 billion in assets and $3.093 billion in liabilities, according to its bankruptcy documents. The company has 200 to 299 creditors.
If FirstEnergy Solutions cannot break free of the 10 contracts named in the temporary restraining order, it will lose an estimated $58 million annually for the next few years and a total of $765 million in the long term, court documents said.
