By John Stang
FirstEnergy Solutions’ recent bankruptcy filing does not absolve it of legal obligations cemented in its nuclear-power plant licenses, according to the U.S. Nuclear Regulatory Commission.
“The NRC licenses remain in full effect, even beyond their stated expiration date, until terminated in writing by NRC,” Louise Lund, director of the NRC’s Division of Licensing Projects, wrote in an April 6 letter to Donald Moul, president of FirstEnergy Solutions Generating Cos.
That covers decontamination and decommissioning of contaminated sites, security of licensed material and classified data, and other operational matters, according to the letter, which was posted this week on the NRC website. The nuclear plants will also remain subject to NRC inspections.
The Akron, Ohio-based power company, a subsidiary of FirstEnergy Corp., filed for Chapter 11 bankruptcy protection on March 31.
Earlier that week, the company announced the closure schedule for three facilities: the 908-megawatt Davis-Besse Nuclear Power Station at Oak Harbor, Ohio, in May 2020; the 1,268-megawatt Perry Nuclear Power Plant at Perry, Ohio, in May 2021; and two reactors at the Beaver Valley Power Station north of Pittsburgh, Pa., that total 1,872 megawatts, in May and October 2021.
The four reactors’ operations licenses from the NRC are not scheduled to expire until different times between 2026 and 2047. The agency said FirstEnergy Solution has met at least the minimum federal requirements for setting aside money in trust funds to pay for decommissioning the power plants.
FirstEnergy has $481.9 million in the trust fund for Beaver Valley No 1, which has an estimated decommissioning cost of $711.7 million. Beaver Valley No. 2’s trust fund currently holds $378.7 million set aside for the projected $481.9 million cleanup. FirstEnergy is the majority owner of the No. 2 reactor, for which it shares decommissioning obligations with Ohio Edison and Toledo Edison.
Meanwhile, Davis-Besse currently has $552.4 million set aside for a decommissioning estimate of only $467.4 million. And Perry’s trust fund has $515.5 million for a project anticipated to cost $651.9 million.
Within two years of closure, FirstEnergy Solutions would be required to provide the NRC with a post-shutdown decommissioning activities report that would lay out the projected cost, approach, and schedule for cleaning up each site.
Corporate spokesman Tom Mulligan declined to say whether FirstEnergy has approached any potential decommissioning contractors. EnergySolutions, which is decommissioning several retired U.S. nuclear power plants, declined to comment. Orano (formerly AREVA), another player in the market, did not respond to a request for comment.
FirstEnergy Solutions has also asked Energy Secretary Rick Perry to order a regional power clearinghouse to financially bolster the company enough to keep its reactors and other power plants online. FirstEnergy Solutions is seeking a guaranteed revenue stream from nuclear and coal power to help it deal with the much lower prices charged by its competitors producing electricity from natural gas.
Section 202(c) of the Federal Power Act says the U.S. energy secretary can during an electricity-supply emergency “order temporary connections of facilities, and generation, delivery, interchange, or transmission of electricity.”
But on March 30, PJM Interconnection, the regional wholesale power transmissions agency that receives FirstEnergy’s electricity, sent its own letter to Perry arguing the announced reactor closures don’t have a currently obvious impact on the agency’s customers.
On Monday at the Bloomberg New Energy Finance Future of Energy Summit in New York City, Perry said there is doubt about DOE taking the 202 route, according to Greentech Media and RTO Insider. Both quoted Perry as saying, “The 202(c) may not be the way that we decide what is the most appropriate, most efficient way to address this. It’s not the only way.”
Appearing Thursday before the House Energy and Commerce energy subcommittee, Perry said his agency is still reviewing the request. “This 202(c) is just now being analyzed,” he said.
FirstEnergy Solutions has not heard back yet from the Department of Energy, Mulligan said.
In discussing potential uses of the 202(c) authority, Perry focused his comments on the national security implications of a loss of electricity: “If you’re in New York City and Wall Street were to lose power, I think anyone would say that puts our national security in jeopardy.”
A number of lawmakers on the subcommittee emphasized the need for the federal government to take steps to safeguard the coal and nuclear power industries, though some expressed skepticism that using the emergency authority under the Federal Power Act would be the correct strategy.
“Section 202(c) is for serious grid emergencies as explicitly defined in the statute, and not designed to bail out power plants from losing money,” Rep. Frank Pallone (D-N.J.) told Perry. “So this request from FirstEnergy in my opinion is like calling 911 because your credit card got declined.”
The lawmaker added that he believes the request is “not just inappropriate, but I think illegal.”
Ohio Legislation
Separately, two identical bills from 2017 remain in play in the Ohio General Assembly to provide up to $178 million annually to FirstEnergy Solutions.
To do that, the measures would increase the monthly bill of a residence receiving power from a nuclear reactor by $2.50. And a nonresidential customer’s bill would increase by $3,500 a month, or by 5 percent of its monthly bill, whichever is lower, according to bills introduced in 2017 by state Sen. John Eklund (R) and Rep. Anthony DeVitis (R).
Eklund is an attorney with the firm of Calfee, Halter & Griswold, whose clients includes FirstEnergy, according to the Energy News Network.
Eklund’s bill stalled in committee in the 2017 session but was revived this year. DeVitis’ bill was introduced in late 2017 prior to the current session. So far this year, neither measure has advanced beyond the committee stage in the Ohio House and Senate, which are still in session.
FirstEnergy Solutions owns the only two nuclear power plants in Ohio.
The Public Utilities Commission of Ohio, which regulates power distribution in the state, has taken no position on the bills.
“The commission is charged with ensuring reliable power delivery and we will continue to do so for all Ohioans. There is no reason for customers of FES – or anyone else in Ohio – to be concerned about whether or not they will have electricity. They will,.” said PUCO Chairman Asim Haque in a recent press release.
