By Scott Suttell

April 3, 2018 - The Chapter 11 bankruptcy filing by FirstEnergy Solutions will present a major test of the Trump administration's commitment to coal, according to this analysis from The Wall Street Journal.

FirstEnergy Solutions, a subsidiary of Akron-based FirstEnergy Corp., operates coal and nuclear plants, and the bankruptcy filing on Saturday night, March 31, came "just days after the company asked the federal government for an emergency declaration that would keep many of them open," The Journal notes. The timing "forces President Donald Trump's Energy Department into a decision on whether to intervene under a lightly used, 83-year-old law and compel the nation's largest electric-grid operator to dispatch power from FirstEnergy's coal and nuclear plants effectively before any other."

From the story:

Trump has been one of the coal industry's biggest boosters, campaigning on reviving a downtrodden industry, and his administration has voiced support for nuclear, too. Both of those fuels are facing tough competition as alternatives—including natural gas, and wind and solar power—have become cheap and more plentiful.

Should the Ohio company's plea succeed, it could protect thousands of jobs at nuclear and coal plants, as well as their suppliers. But it would hurt rival energy businesses and could raise electricity prices for companies and consumers across the Midwest and mid-Atlantic states. That poses significant risk to Trump by antagonizing supporters among electricity users and companies in the oil-and-gas industry that have become primary suppliers to power plants.

The story notes that a "broad alliance formed last year opposes a bailout for nuclear and coal plants. The group includes traditional Republican allies in oil, gas and manufacturing that have joined in an unusual pairing with wind and solar producers and environmentalists."

Meanwhile, Politico reports that FirstEnergy Solutions' grid operator, PJM Interconnection, sent the U.S. Department of Energy a letter saying "there was no need to use the agency's emergency powers to keep FES' five big power plants operating."

PJM "said it would not address FES' 'several misstated facts' by the utility but instead asked DOE to allow PJM's normal process of assessing the impact of plant retirements to go forward," according to Politico. It also said it's not concerned about the loss of the three nuclear plants FES has said it wants to retire, noting, "PJM can state without reservation there is no immediate threat to system reliability."

FirstEnergy Solutions also is asking the bankruptcy court "to let it out of $765 million worth of power purchase agreements it entered into with renewable energy producers between 2003 and 2011," Politico says. "The contracts were necessary at the time to acquire sufficient credits to meet state renewable portfolio standards, but they are no longer needed now, the company says." 

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