Bloomberg reporter Julie Johnsson just gave us all we need to know about the reasons behind FirstEnergy’s dumping of its coal-fired Harrison Power Station on WV rate payers.
FirstEnergy, based in Akron, Ohio, declined 1.2 percent to $40.72 at the close in New York, the lowest since Aug. 10, according to data compiled by Bloomberg.
The power company faces negative cash flows of about $1.1 billion from 2013 to 2015 as it pays off $1.4 billion in debt at its retail power marketing business and about $400 million held by a transmission unit, Julien Dumoulin-Smith, a New York-based UBS analyst, said in a report today.
“We believe the company continues to contemplate asset sales to meet its equity needs, which are likely around $500 million, to maintain its corporate credit rating,” Dumoulin- Smith said.
And what did Ms. Johnsson point to as a perfect example of the assets FE is struggling to sell in a desperate attempt to salvage its already low credit rating?
FirstEnergy has asked West Virginia regulators to allow it to shift ownership of a merchant coal plant to a regulated utility, adding about $1.1 billion to the rate base that determines the utility’s earnings.
That’s all you need to know.
So, will the WV PSC let FE force WV rate payers to bail out the company’s financial disaster? This is starting to look like Century all over again. This time, it’s the power company itself that wants the bailout.