FirstEnergy Solutions and FirstEnergy Nuclear Operating Company File Voluntary Petitions for Chapter 11 Restructuring
• Operations Expected to Continue Normally during Restructuring
• Economic Improvements Sought for Operations
• Constructive Talks Continue with Creditors
• Legislative and Regulatory Relief is under Review
AKRON, Ohio, March 31, 2018 – FirstEnergy Solutions (FES), its subsidiaries and FirstEnergy Nuclear Operating Company (FENOC) (together, the "Filing Entities") today announced that to facilitate an orderly financial restructuring, they have filed voluntary petitions under Chapter 11 of the Federal Bankruptcy Code with the U.S. Bankruptcy Court in the Northern District of Ohio in Akron. The Filing Entities collectively have over $550 million in cash, which they believe is sufficient liquidity to continue normal operations and meet post-petition obligations to employees, suppliers and customers as they come due.
FES and FENOC own, and operate two coal-fired plants, one dual fuel gas/oil plant, one pet-coke fired plant and three nuclear power plants in the competitive, or non-regulated, power-generation industry. FirstEnergy Corp. announced in November 2016 that it planned to exit the competitive generation business. On March 28, 2018, FES filed notice with PJM Interconnection LLC (PJM), the regional transmission organization, that the three nuclear facilities would be deactivated or sold during the next three years. In the meantime, all of the plants will continue current operations.
Donald R. Schneider, President of FES, said, "Given the prospective timing of federal and state review and our ongoing cash needs and debt service obligations, the FES and FENOC Boards of Directors determined that the Chapter 11 filing represents our best path forward as we continue to pursue opportunities for restructuring, asset sales and legislative and regulatory relief. We believe that this decision will best serve our customers, employees and business partners."
The Filing Entities expect that the Chapter 11 process will enable them to improve the viability of their operations. FES will also continue seeking legislative and regulatory relief at the state and federal level.
For example, on March 29, 2018, FES filed an application with U.S. Secretary of Energy Rick Perry seeking an emergency order directing PJM to secure the long-term capacity of certain nuclear and coal-fired plants in the region – including FES plants – to compensate their owners "for the full benefits they provide to energy markets and the public at large, including fuel security and diversity."
The relief is being sought under Section 202(c) of the Federal Power Act, which gives the Secretary extraordinary powers to address such emergencies.
As previously announced, FES and FENOC have engaged in constructive discussions with parties representing their creditors. Those discussions are continuing as the Filing Entities explore strategic alternatives for the competitive generation businesses.
The Filing Entities have filed customary first-day motions with the Bankruptcy Court to support operations during the court-supervised process, including motions requesting authority to pay prepetition and post-petition employee wages and benefits and to continue customer programs. The Filing Entities will continue to adhere to all applicable regulatory and environmental standards.
Additional information can be accessed by visiting the Filing Entities’ restructuring website at www.fes.com/restructuring, calling the Restructuring Hotline, toll-free in the U.S. at (855) 934-8766, or sending an email to FESinfo@primeclerk.com. Court filings and other documents related to the court-supervised process are available on a separate website administered by the Filing Entities’ claims agent, Prime Clerk, at https://cases.primeclerk.com/FES.
The Filing Entities’ parent company, First Energy Corp. (NYSE: FE), and its other subsidiaries, including its regulated subsidiaries, are not part of the filing and will not be subject to the Chapter 11 process.
Akin Gump Strauss Hauer & Feld LLP is serving as legal counsel to the Filing Entities, Lazard Freres & Co. is serving as investment banker and Alvarez & Marsal North America, LLC is serving as restructuring advisor and Charles Moore has been appointed as Chief Restructuring Officer for the Filing Entities.
FES is a subsidiary of FirstEnergy Corp. FES provides energy-related products and services to retail and wholesale customers; and owns and operates 5,381 MWs of fossil generating capacity through its FirstEnergy Generation subsidiaries. FES also owns 4,048 MWs of nuclear generating capacity through its FirstEnergy Nuclear Generation subsidiary. Nuclear generating plants are operated by FENOC, which is a separate subsidiary of FirstEnergy Corp. Follow FirstEnergy on Twitter @FirstEnergyCorp or online at www.firstenergycorp.com.
Case Information: Court filings and other information related to the Chapter 11 proceedings are available on a separate website administered by FirstEnergy Solutions’ claims agent, Prime Clerk, at https://cases.primeclerk.com/FES.
Information Hotlines: FirstEnergy Solutions has established two toll-free Information Hotlines:
- Vendor/General Hotline – 855-934-8766
- Customer Hotline – 888-254-6359
Information is also available by emailing FESinfo@PrimeClerk.com.