About a dozen FirstEnergy Corp. coal, nuclear and gas power plants, its nuclear fuel, and other assets are now worth $9.2 billion less than this time last year, the Ohio-based company disclosed on Tuesday.
The Akron company’s decision to sell or close power plants that operate in competitive states — where revenue is not guaranteed by ratepayers — has forced it to impair a significant portion of its portfolio and led to a $6.2 billion income loss in 2016.
The owner of the electric utility West Penn Power, the Bruce Mansfield coal power plant and Beaver Valley nuclear station in Beaver County, FirstEnergy has been in a period of transformation over the past few years.
Seeing a troubled and volatile electric market, weak demand for electricity and steep competition from natural gas, FirstEnergy’s leaders have refocused the company on its utility and transmission assets. Those have steady returns, assured by regulators.
FirstEnergy CEO Chuck Jones said in November that the company will be rid of its competitive generation assets by mid-2018.
“It’s not a business we want to be in,” he said at the time.
The company has already sold four natural gas power plants in Pennsylvania.
Untangling the remaining assets from what FirstEnergy sees as its brighter future is what caused the $9.2 billion impairment during the past quarter.
The amount includes the writedown in the value of the power plants and the closing costs associated with taking some out of service early.
In a statement accompanying the earnings release on Tuesday, Mr. Jones said, “In 2016, we achieved our financial targets, made significant progress on our regulated growth plans, and began an important strategic review that is designed to support our transition into a fully regulated company.”
Anya Litvak: firstname.lastname@example.org or 412-263-1455.