FES filings rankle unions

Reposted from: The Plain Dealer | — Wednesday, March 13, 2019

FES filings rankle unions – Reorganization wouldn’t honor labor agreements, groups say

John Funk —

FirstEnergy Solutions and its creditors hope FES can emerge from bankruptcy as an entirely new company, debt-free and maybe free of its union contracts at its nuclear power plants.

The new company would be entirely free of FirstEnergy, have its own board of directors and issue its own stock, according to initial company filings last month and during the past weekend.

The reorganization, the subject of what is sure to be a contentious hearing next week and possibly up for a vote of all FES creditors in May, is already the target of heavy criticism from labor, consumer and environmental groups.

The Utility Workers Union of America and the International Brotherhood of Electrical Workers representing employees at the company’s four nuclear and two remaining coal plants in Ohio and Pennsylvania noted in objections filed Tuesday that the reorganization plan is designed deliberately to “breach the collective bargaining agreements” at the plants by not requiring that the new company accept the contracts.

And that could pose safety issues, especially at the nuclear plants, the unions warned.

“Operating power plants without the trained workforce that now exists by virtue of the tenure and stability of experienced unionized employees introduces serious risk into the future operations of the plants,” the unions wrote.

They also are arguing that when FES recently sold off two of its smaller power plants it followed the letter of the contracts, which required the buyers to accept, at least initially, the contracts as they were written.

If FES insists on this course, the unions have the right under bankruptcy case law to file for damages “that will impair the recovery [of money owed] for other creditors,” Cleveland-based labor lawyer Joyce Goldstein wrote.

A group of Ohio and regional consumer and environmental groups led by the Midwest-based Environmental Law and Policy Center has objected to the reorganization plan because it appears to assume that the new company will own and operate the four nuclear plants and two coal-fired plants.

But that is not a certainty, they argue, and further point out that the company has until the end of this month to report the fiscal health of the decommissioning funds that by law each must ac- company each reactor, what- ever company owns it. The Nuclear Regulatory Com- mission, using 2016 figures, earlier said the funds were adequate — but that was an analysis based on the plants continuing to operate. FES has officially announced that it will close all of the plants by the fall of 2021.

One reality that the environmental and consumer groups are not acknowledgong in their objection is the company’s effort to persuade at least Ohio lawmakers to create new subsidies to support the continued operations of the plants. Proposed legislation is expected by the end of March.