FirstEnergy and AMP Sign Memorandum of Understanding to Build New
Natural Gas Generation in Eastlake
AKRON, Ohio, Nov. 8, 2012
/PRNewswire/ -- FirstEnergy Corp. (NYSE: FE) and American
Municipal Power, Inc. (AMP) have entered into a non-binding
memorandum of understanding (MOU) to site, build and operate a
natural gas peaking facility located on the grounds of
FirstEnergy's existing Eastlake Plant in Eastlake, Ohio. The proposed project is
subject to regulatory approval.
As part of the non-binding MOU, FirstEnergy would supervise
construction of the four combustion turbine units that are capable
of producing 873 megawatts (MW). AMP will provide the
construction financing and own 75 percent of the generation output
upon completion, while FirstEnergy will fund and own the remaining
25 percent of the output in 2016. Plans call for the facility
to be operational in early 2016.
Adding new generation is expected to reduce or extend the
timeframe for some of the previously announced transmission
projects planned by FirstEnergy by alternatively addressing
reliability concerns resulting from power plants being deactivated
in the region due to new U.S. Environmental Protection Agency
rules.
"This project is expected to reduce our estimated
transmission spending for projects related to plant deactivations
by about $200 million through 2016,"
said Mark T. Clark, executive vice
president and chief financial officer, FirstEnergy. "Our
estimated transmission spend could then be in the $500 to $700 million range, with approximately
$150 million of that total to be
incurred in 2013."
Plant construction is expected to begin in the latter half of
2014 and will take approximately 15 – 20 months to complete.
It is expected that up to 150 temporary construction jobs will be
created for this project.
FirstEnergy's Eastlake Plant was selected for the new combustion
turbines due to its existing transmission system interconnections
and the fact it is located in a region that could be impacted by
the deactivation of older power plants. Earlier this year,
FirstEnergy announced that nine older, coal-fired power plants,
including the Eastlake Plant, would be deactivated as a result of
the U.S. Environmental Protection Agency's new Mercury and Air
Toxics Standards (MATS) and other environmental
regulations.
American Municipal Power, Inc. (AMP) is a nonprofit organization
that supplies wholesale power supply for municipal electric
systems. AMP serves 129 members - 128 member municipal
electric communities in the states of Ohio, Pennsylvania, Michigan, Virginia, Kentucky and West
Virginia, as well as the Delaware Municipal Electric
Corporation, a joint action agency headquartered in Smyrna, Delaware. Combined, these
publicly owned utilities serve approximately 625,000 customers.
FirstEnergy is a diversified energy company dedicated to safety,
reliability and operational excellence. Its 10 electric
distribution companies form one of the nation's largest
investor-owned electric systems, serving customers in Maryland, Ohio, Pennsylvania, New
Jersey, New York and West
Virginia. Its generation subsidiaries control more than
20,000 megawatts of capacity from a diversified mix of scrubbed
coal, non-emitting nuclear, natural gas, hydro, pumped-storage
hydro and other renewables. Follow FirstEnergy on Twitter
@FirstEnergyCorp.
Forward-Looking Statements: This news release
includes forward-looking statements based on information currently
available to management. Such statements are subject to certain
risks and uncertainties. These statements include declarations
regarding management's intents, beliefs and current expectations.
These statements typically contain, but are not limited to, the
terms "anticipate," "potential," "expect," "believe," "estimate"
and similar words. Forward-looking statements involve estimates,
assumptions, known and unknown risks, uncertainties and other
factors that may cause actual results, performance or achievements
to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Actual results may differ materially due to: the speed
and nature of increased competition in the electric utility
industry, the impact of the regulatory process on the pending
matters before FERC and in the various states in which we do
business including, but not limited to, matters related to rates,
the uncertainties of various cost recovery and cost allocation
issues resulting from ATSI's realignment into PJM, economic or
weather conditions affecting future sales and margins, changing
energy, capacity and commodity market prices and availability,
financial derivative reforms that could increase our liquidity
needs and collateral costs, the continued ability of our regulated
utilities to collect transition and other costs, operation and
maintenance costs being higher than anticipated, other legislative
and regulatory changes, and revised environmental requirements,
including possible GHG emission, water intake and coal combustion
residual regulations, the potential impacts of CAIR, and any laws,
rules or regulations that ultimately replace CAIR, and the effects
of the EPA's MATS rules, the uncertainty of the timing and amounts
of the capital expenditures that may arise in connection with any
litigation, including NSR litigation or potential regulatory
initiatives or rulemakings (including that such expenditures could
result in our decision to deactivate or idle certain generating
units), the uncertainties associated with our plans to deactivate
our older unscrubbed regulated and competitive fossil units and our
plans to change the operations of certain fossil plants, including
the impact on vendor commitments, and the timing of those
deactivations and operational changes as they relate to, among
other things, the RMR arrangements and the reliability of the
transmission grid, issues that could result from the NRC's review
of the indications of cracking in the Davis Besse Plant shield
building, adverse regulatory or legal decisions and outcomes with
respect to our nuclear operations (including, but not limited to
the revocation or non-renewal of necessary licenses, approvals or
operating permits by the NRC or as a result of the incident at
Japan's Fukushima Daiichi Nuclear
Plant), adverse legal decisions and outcomes related to ME's and
PN's ability to recover certain transmission costs through their
transmission service charge riders, the continuing availability of
generating units, changes in their operational status and any
related impacts on vendor commitments, replacement power costs
being higher than anticipated or inadequately hedged, the ability
to comply with applicable state and federal reliability standards
and energy efficiency mandates, changes in customers' demand for
power, including but not limited to, changes resulting from the
implementation of state and federal energy efficiency mandates, the
ability to accomplish or realize anticipated benefits from
strategic goals, our ability to improve electric commodity margins
and the impact of, among other factors, the increased cost of fuel
and fuel transportation on such margins, the ability to experience
growth in the Regulated Distribution and Competitive Energy
Services segments, changing market conditions that could affect the
measurement of liabilities and the value of assets held in our
NDTs, pension trusts and other trust funds, and cause us and our
subsidiaries to make additional contributions sooner, or in amounts
that are larger than currently anticipated, the impact of changes
to material accounting policies, the ability to access the public
securities and other capital and credit markets in accordance with
our financing plans, the cost of such capital and overall condition
of the capital and credit markets affecting us and our
subsidiaries, changes in general economic conditions affecting us
and our subsidiaries, interest rates and any actions taken by
credit rating agencies that could negatively affect us and our
subsidiaries' access to financing, increased costs thereof, and
increase requirements to post additional collateral to support
outstanding commodity positions, LOCs and other financial
guarantees, the state of the national and regional economy and its
impact on our major industrial and commercial customers, issues
concerning the soundness of domestic and foreign financial
institutions and counterparties with which we do business, the
risks and other factors discussed from time to time in our SEC
filings, and other similar factors. Dividends declared from time to
time on FE's common stock during any annual period may in the
aggregate vary from the indicated amount due to circumstances
considered by FE's Board of Directors at the time of the actual
declarations. A security rating is not a recommendation to buy or
hold securities and is subject to revision or withdrawal at any
time by the assigning rating agency. Each rating should be
evaluated independently of any other rating. The foregoing review
of factors should not be construed as exhaustive. New factors
emerge from time to time, and it is not possible for management to
predict all such factors, nor assess the impact of any such factor
on FirstEnergy's business or the extent to which any factor, or
combination of factors, may cause results to differ materially from
those contained in any forward-looking statements. FirstEnergy
expressly disclaims any current intention to update, except as
required by law, any forward-looking statements contained herein as
a result of new information, future events or otherwise.
www.firstenergycorp.com
SOURCE FirstEnergy Corp.