FirstEnergy Solutions can see the light at the end of the bankruptcy tunnel. The beleaguered power generation subsidiary of FirstEnergy reached a settlement agreement last week with its parent company, bondholders and other creditors. Rarely do parties get all they seek in bankruptcy court. A good arrangement makes for shared unhappiness. Yet FES did get what it needed to have a chance at survival.
The company won an extension to share information technology and other services with FirstEnergy. The parent has provided certainty regarding pensions, and the agreement establishes a clean revenue break — addressing suspicions that any financial assistance for the FES coal-fired and nuclear power plants eventually would flow back to FirstEnergy.
The prize for FirstEnergy is the near prospect of separation. The deal advances the plans of the Akron-based utility to become a fully regulated operation, liberated from the debts and risks of an FES carrying the burden of those less-than-competitive coal and nuclear power plants. Consider the FirstEnergy stock price. It hit a 52-week high this week before finishing the week slightly below that mark.
Akron Beacon Journal – September 1, 2018.
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