NEW YORK / WASHINGTON (Reuters) – US energy company FirstEnergy Corp. ( FE.N ) called on the federal government on Thursday to use lesser-used emergency generators to prevent multiple nuclear and coal disasters. fired power plants open, a move that has been vilified by critics as an attempt at corporate recovery.
On Wednesday, Ohio FirstEnergy said it shut down several nuclear power plants in Ohio and Pennsylvania would over the next three years without any state or federal relief. FirstEnergy's FirstEnergy Solutions Unit urged US Secretary of Energy Rick Perry to hire regional power grid operator PJM Interconnection to set up a contract that will reward coal and nuclear power plant owners for the benefits such as reliability and cost these units offer.
PJM then rejected the need for an emergency order. "Nothing we've seen indicates that these units are in trouble," said Vincent Duane, senior vice president at PJM, calling the problem "fundamentally a business problem."
A spokesman for FirstEnergy Solutions declined to comment Thursday about speculation that the unit went bankrupt, but he drew attention to a filing by the company with the Energy Department earlier in the day. The letter contained a comment by Chief Executive Officer of FirstEnergy Corp., Charles Jones, in February that he would be "shocked" if FirstEnergy Solutions did not file for bankruptcy at the end of March.
Coal and nuclear power plant operators have had problems in recent years, as low gas prices as a result of the shale boom have led utilities to withdraw dirty coal-fired power plants. Last year, Perry proposed a plan to subsidize coal and nuclear power to enable so-called base load generation, which relates to units running around the clock.
U.S. The regulators rejected this proposal in January and said they would conduct a study on grid reliability. Many network operators, including PJM, said they are already considering the reliability of their systems and the available fuel resources for power generation.
Murray Energy Corp., which supplies coal to FirstEnergy and lobbies with elected representatives for the operation of coal and nuclear power plants, said it fully supports the call for emergency aid.
"As a result of FERC's failure, critical power plants will close, thousands of American jobs will be lost, and the reliability, resilience and safety of our power grids will be forever compromised," Murray Energy said in a statement recalling Perry's refusal – Resistance to the Federal Energy Regulatory Commission.
FirstEnergy said in November 2016 that it would abandon the competitive power generation business overseen by FirstEnergy Solutions, as natural gas consumes a larger portion of the electricity load.  On Wednesday, FirstEnergy Solutions informed PJM that it would shut down all nuclear reactors in Ohio and Pennsylvania in 2020 and 2021 with a total of 4,048 megawatts (MW).
One megawatt is enough electricity for 1,000 US households.
FirstEnergy said it wants an emergency order because the reliability of the power grid is compromised because "plants that are useful for many years but can not operate profitably under current market conditions will be taken out of service prematurely".
However, PJM said FirstEnergy's assets have been "financially stressed for some time".
The Department of Energy has stated that it has received the request from FirstEnergy and will go through its standard review process. It did not say anything else. PJM said such an application, if granted, would effectively bypass FERC and bring it into "unexplored waters".
FirstEnergy's shares closed 1.1 percent on Thursday at $ 34.01.
The use of emergency power-related commands has been minimal and, according to the Department of Energy, has only been triggered eight times since December 2000, usually due to natural disasters or power outages.
Groups that disagree have condemned FirstEnergy's request.
The American Petroleum Institute (API), a trading group for the oil and gas industry, said: "FirstEnergy's contention that the power grid is in immediate danger from these power plant failures is simply not true.
" PJM is Responsible for the reliability of the network and if there is an emergency, PJM already has the tools to respond, "API said in a statement
The environmental group of the Sierra Club said it would sue if Perry runs out of any order FirstEnergy to save.
"Taxpayers and regulators have already rejected several attempts by FirstEnergy to rescue these coal and nuclear power plants that can no longer compete in the market," said Mary Anne Hitt, director of the Beyond Coal campaign "The Sierra Club Declaration.
Other companies have sought support from federal, state, and regional authorities to put their coal and nuclear power plants into operation and some states, including New York and Illinois, have offered subsidies for nuclear power plants.
These companies argue that the diversification of fuel sources is necessary to operate the power grid optimally. More coal-fired power plants are expected to be shut down in the coming years, and natural gas has recently overtaken coal as the largest source of electricity generation in the United States.
Most states also set rules to promote renewable energy production.
Reporting by Scott DiSavino of New York and Valerie Volcovici of Washington; Arrangement by David Gaffen, Tom Brown and Leslie Adler