Name: With Ohio bailout law secured, FirstEnergy Solutions successor moves to increase share buybacks by $300 million
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With Ohio bailout law secured, FirstEnergy Solutions successor moves to increase share buybacks by $300 million

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NEW!2,837sharesCOLUMBUS, Ohio -- Leaders of a former FirstEnergy subsidiary, which Ohio electricity customers will soon begin paying $150 million annually to subsidize under a nuclear bailout law Ohio officials passed last year, have moved to spend an extra $300 million on repurchasing the company’s own stock.The stock buybacks, meant to benefit corporate shareholders, come less than a year after an aggressive multi-year lobbying effort by FirstEnergy that culminated in Gov. Mike DeWine and state lawmakers approving $1 billion in bailout money funded by surcharges on Ohioans’ electric bills. The company and elected officials who backed the bailout argued without state money, the power plants and their parent company would become insolvent.The board of directors for the company now known as Energy Harbor on Friday voted to increase authorization for its stock buyback program from $500 million to $800 million, according to an investor presentation the company posted to its website. Energy Harbor can buy back the stock any time until Aug. 27., under the terms of a company plan, approved as the Akron company spun off from FirstEnergy as it emerged from bankruptcy proceedings earlier this year.Private companies buy shares of their own stock to help increase overall share prices by reducing the number of shares available on the market. While the company’s stock is not listed on any U.S. stock exchange, shares of Energy Harbor are available for purchase by the general public through private brokerage companies.The company’s stock was trading at $36.01 a share when markets closed Tuesday evening, more than double the $15.75 it cost when shares first began trading on April 7.The Energy Harbor investors presentation says the company’s “visible" cash flow generated by its nuclear plants is supported by “clean air zero emission credits,” a term for the subsidy created by the nuclear bailout law, called House Bill 6. Energy Harbor owns the Perry Nuclear Power Plant in Lake County and the Davis-Besse Nuclear Power Station near Toledo. It argues “free cash flow increase from potential future carbon policy offers meaningful upside for Energy Harbor."In a statement, the company said money for the stock buyback “is not related to the funding generated by House Bill 6 which does not begin until April 2021."“Once received, HB6 funds will be used to keep our nuclear units in Ohio operating, maintain more than 4,000 jobs, and generate 90 percent of the carbon free electricity for the State of Ohio,” the statement said.But Ned Hill, an economic development professor at Ohio State University and critic of HB6, said he’s not surprised that Energy Harbor would move to repay its investors now that their subsidy is secure.He also said contrary to the company’s arguments that it was in financial trouble, thus requiring the bailout, the increased share buyback is a sign Energy Harbor management is confident it’s going to make money.“This was an act of socialism, where you socialize the risk and privatize the benefits,” Hill said. “So it’s no big surprise they’re now going to make sure their investors get a return from their investment in the political process. They won, so they get their cash.”The subsidy is paid for by a rate increase on all Ohio electricity customers. Under the bill, from 2021 until 2027, every Ohio electricity customer would have to pay a new monthly surcharge that ranges from 85 cents for residential customers to $2,400 for large industrial plants. The new charges will be offset by the elimination of different subsidies that paid for renewable energy projects.FirstEnergy to get the legislation passed that included who ended up supporting the bailout. That included helping then-State Rep. Larry Householder to lead the Ohio House. Company officials argued that without the subsidy, the aging plants would close, their jobs would be lost and Ohio’s energy options would be diminished.FirstEnergy , after spinning off FirstEnergy Solutions as a separate company. FirstEnergy now focuses on transmission and distribution of electricity through power lines. FirstEnergy Solutions changed its name to Energy Harbor, and now owns the nuclear power plants.Todd Snitchler, a former chairman of the Ohio Public Utilities Commission who now runs a trade group for power plants that compete with Energy Harbor, said the stock buyback underscores arguments he and other House Bill 6 opponents made last year.“If you look at the state of Ohio, and all the things that are going on there, and you find a company that’s found a way to extract $1 billion from the pockets of Ohioans and is returning $800 million to their investors, that doesn’t sound like a timely move to maintain a good appearance or good reputation,” said Snitchler a former Republican Ohio state lawmaker. “Given the struggle this country is going through, this feels poorly timed."Spokespeople for Householder, Senate President Larry Obhof and Gov. Mike DeWine have not returned messages seeking comment for this story.Read previous cleveland.com coverageNote to readers: if you purchase something through one of our affiliate links we may earn a commission.

NEW!2,837sharesCOLUMBUS, Ohio -- Leaders of a former FirstEnergy subsidiary, which Ohio electricity customers will soon begin paying $150 million annually to subsidize under a nuclear bailout law Ohio officials passed last year, have moved to spend an extra $300 million on repurchasing the company’s own stock.The stock buybacks, meant to benefit corporate shareholders, come less than a year after an aggressive multi-year lobbying effort by FirstEnergy that culminated in Gov. Mike DeWine and state lawmakers approving $1 billion in bailout money funded by surcharges on Ohioans’ electric...

With Ohio bailout law secured, FirstEnergy Solutions successor moves to increase share buybacks by $300 million

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