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General Public Utilities

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General Public Utilities

FirstEnergy Corp.
Traded as S&P 500 Component
Industry Electric Utility
Founded 1997
Headquarters Akron, Ohio, U.S.
Area served 4.5 million customers within 36,100 square miles (93,000 km2) of Ohio, Pennsylvania and New Jersey (count prior to 2011)
Key people Anthony J. Alexander, president and chief executive officer
Products Electricity generation, transmission and distribution, energy management, other energy-related services
Revenue $16.258 billion (2011)
Total assets Increase US$48 billion (2010)
Employees 17,000 (2010)

FirstEnergy Corporation is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission, and distribution of electricity, as well as energy management and other energy-related services. Its ten electric utility operating companies comprise the nation’s largest investor-owned electric system, based on serving 6 million customers within a 67,000-square-mile (170,000 km2) area of Ohio, Pennsylvania, West Virginia, Virginia, Maryland, New Jersey and New York. Its generation subsidiaries control more than 23,000 megawatts of capacity, and its distribution lines span over 194,000 miles. In 2013, FirstEnergy ranked 181 on the Fortune 500 list of the largest public corporations in America.

Formation of the company

FirstEnergy was formed in 1997, when Ohio Edison Company and its subsidiary, Pennsylvania Power Company merged with Centerior Energy Corp. and its subsidiaries, The Cleveland Electric Illuminating Company and The Toledo Edison Company. In 2001, FirstEnergy merged with GPU, Inc., the owner of Jersey Central Power & Light Company, Pennsylvania Electric Company (Penelec), and Metropolitan Edison Company (Met-Ed).

Ohio Edison

Ohio Edison Company (formerly )[1] was a publicly traded holding company that began in 1930, from the consolidation of 200 electric companies. By 1950, it ended up with two utility operating companies, Pennsylvania Power and Ohio Edison. It continued in existence until 1997, when its merger with Centerior formed FirstEnergy:

  • In 1944, the Pennsylvania Power Company became a subsidiary of Ohio Edison, and is now one of the ten operating utilities.
  • In 1950, the Ohio Edison Company merged with the Ohio Public Service Company, which continued to operate under its new Ohio Edison name. It is now one of the ten FirstEnergy operating companies, and is the main power provider for northeastern Ohio outside of Cleveland itself.


Centerior Energy Corporation (formerly ) was formed in 1986 from the merger of two old operating companies. Centerior was based in Independence, Ohio and existed as a publicly traded holding company for only ten years, until its merger with Ohio Edison formed FirstEnergy in 1997:

  • Cleveland Electric Illuminating Company, commonly known as The Illuminating Company, was a publicly traded operating company through 1986, until it merged with Toledo Edison to come under the control of Centerior. Having been acquired by 1929, (org chart) by 1940 it had become one of ten major direct subsidiaries of North American Company, which in turn had once been one of the original 12 stocks listed in the Dow Jones Industrial Average.[2]
  • Toledo Edison Company (formerly ) was a publicly traded utility operating company, until it merged to form Centerior in 1986.


General Public Utilities (formerly ) was a publicly traded utility holding company in Morristown, New Jersey. In 1996, the company was reorganized and renamed GPU, Inc. In 1996, it formed a new division as well, GPU Energy, which became the holding company for its three utility operating companies:

  • Jersey Central Power and Light
  • Penelec, formerly Pennsylvania Electric Company
  • Met-Ed, formerly Metropolitan Edison

In 2001, FirstEnergy Corporation, with its four utility operating companies, merged with GPU, Inc., bringing GPU's three additional operating companies into FirstEnergy as well.

Through the 2001 acquisition of GPU, FirstEnergy also acquired:

  • MYR Group (formerly ), a subsidiary that GPU had created as a publicly traded company in the 1996 reorganization, to install and maintain utility power lines and cellular telephone communications towers.[3]

In 1989, Standley H. Hoch left the General Dynamics Corporation in St. Louis and became the CEO of General Public Utilities, a large Parsippany-based utility, perhaps best known as the previous owner of the Three Mile Island nuclear plant. Mr. Hoch had two mandates: trim management and lower costs, and fight to repeal the Public Utilities Holding Company Act of 1935, which makes it difficult for utilities to operate across state lines.

In 1990, GPU paid about $600,000 to Fleishman-Hillard, GPU's only outside public relations agency, largely to supplement the company's lobbying effort.

Allegheny Energy

Main article: Allegheny Energy

Allegheny Energy is an electric utility serving customers in Pennsylvania, West Virginia, Virginia, and Maryland. Its regulated subsidiaries are West Penn Power (serving Pennsylvania), Monongahela Power (northern West Virginia), and The Potomac Edison Company (western Maryland, parts of eastern West Virginia, and northern Virginia). The electric generating plants are operated by subsidiary Allegheny Energy Supply Company and Monongahela Power.

Before the formation of Allegheny Energy, the holding company was Allegheny Power System which had three utility operating units. The brand name Allegheny Power was used on customer bills, trucks and company equipment starting in 1996. In 1997, the company attempted to merge with Pittsburgh-based Duquesne Light Company. The merger was withdrawn by both parties and both companies did not merge. In 1999, Allegheny Power purchased the West Virginia operations of UtiliCorp United's West Virginia Power. UtiliCorp purchased Virginia Electric and Power Company's (present day Dominion Virginia Power) West Virginia service area in 1986 and renamed the acquired service area West Virginia Power.

In February 2010, Allegheny Energy announced plans to merge with FirstEnergy. The merger was approved by stockholders of both companies, the Federal Energy Regulatory Commission, and regulatory commissions in Virginia, West Virginia, Maryland, and Pennsylvania. The merger was finalized when the Pennsylvania Public Utilities Commission approved the merger on February 24, 2011; the merger closed on February 25, 2011.[4] The merger does not include Allegheny's service area in Virginia, which was purchased in 2010 by the Shenandoah Valley Electric Cooperative and the Rappahannock Electric Cooperative.

After the merger with Allegheny Energy, FirstEnergy was the largest investor-owned electric utility in the country for a short period of time based on customers served before the Exelon/Constellation and Duke Energy/Progress Energy mergers.

Generating capacity

FirstEnergy's electric generation is primarily from coal and nuclear power plants. The system also includes natural gas, oil, and hydroelectric power plants. FirstEnergy operates the Beaver Valley, Davis-Besse, and Perry nuclear power plants.

Environmental record

A study conducted by the University of Massachusetts Amherst recognized the relatively low pollution profile of FirstEnergy. Although FirstEnergy placed 58 out of 100 of the country's largest polluters, the company performed better than its regional competitors, including American Electric Power, which ranked number 35.[5]

FirstEnergy is required to pay $1.5 billion by 2011 as part of a settlement to end a lawsuit that the United States Environmental Protection Agency has filed. This lawsuit alleged that the company failed to install pollution control equipment when upgrading its coal burning plants. Also as part of the settlement, major pollution control equipment is now being installed at the FirstEnergy Sammis site and others. This lawsuit was one of the New Source Review lawsuits filed in the 1990s.[6]

To provide cleaner energy to its customers, FirstEnergy took several important steps in 2009. First, the company announced plans in April to repower units 4 and 5 at its R.E. Burger Plant in Shadyside, Ohio, to generate electricity principally with biomass, the only base load renewable source that can displace coal electrons.[7] Furthermore, FirstEnergy is hosting a 1MWe pilot plant test of carbon capture retrofit equipment on one of the remaining coal units at the R.E. Burger Plant.[8] In September, FirstEnergy decided to complete construction on the Fremont Energy Center, a 707-MW natural-gas-fired peaking plant by the end of 2010.[9] And finally in November, FirstEnergy purchased the rights to develop a compressed-air electric generating plant in Norton, Ohio, which Ohio Governor Ted Strickland praised as "an example of how we can leverage technology and our natural resources to grow our economy and ensure our energy future." The Norton project, part of the company’s overall climate change strategy, has the potential to be expanded to up to 2,700 MW of capacity—the largest in the world by far. According to the Electric Power Research Institute, "a compressed-air energy storage project of this size...could be a key component in integrating large-scale intermittent renewables (such as wind) onto the nation's grid system."[10] Together, these projects, when completed, will further reduce the utility’s emissions of CO2, which already is about one-third below the regional average.

FirstEnergy Solutions Corp. has also given renewable energy certificates to help balance out the amount of electricity used in Earth Day events that were held at nine post-secondary education locations in Maryland, New Jersey, Ohio, and Pennsylvania. Each of the schools received five SmartWind REC’s, enough energy to light a large building for the entire day.[11]

A July 2012 consent decree from the Pennsylvania Department of Environmental Protection is forcing FirstEnergy to close the Little Blue Run Lake, an unlined waste impoundment in Beaver County, Pennsylvania and Hancock County, West Virginia. Coal ash waste slurry has been piped there from FirstEnergy's Bruce Mansfield Power Plant since 1974. The reservoir at Little Blue Run is the country's largest coal ash impoundment. Pollutants including sulfates, chlorides, and arsenic have been found in groundwater nearby. FirstEnergy must stop dumping coal ash at the site by 2016, pay a penalty of $800,000, provide clean water to local residents, and do environmental monitoring of seeps for toxic pollutants including selenium, boron, and arsenic.[12][13]

In November 2012 FirstEnergy led an aggressive behind the scene attack on Ohio's electric consumers. Quietly campaigning to have lawmakers amend state efficiency standards -- without public hearings -- during the lame duck General Assembly sessions. Energy efficiency became a state mandate in 2008 when lawmakers agreed with former Gov. Ted Strickland after months of debate to pass a law requiring electric utilities to help customers use less electricity every year -- 22 percent less by 2025 than they did in 2009.Under the 2008 law, FirstEnergy slaps companies that do not invest in energy efficiency with higher rates. But industries that use their waste heat to make power could escape that rate increase. [14]

As of November 29, 2012 FirstEnergy Corp. has abandoned its behind-the-scene lobbying campaign to persuade lawmakers to gut a four-year-old law requiring utilities to help customers use less electricity by switching to energy efficient equipment and lighting. [15]

Corporate Crime

According to the Multinational Monitor magazine (November/December 2006), First Energy was named one of the "10 worst corporations."

Notable accidents and incidents

  • Anthony J. Alexander has been president and chief executive officer of FirstEnergy since 2004. In May 2007, Forbes listed Alexander as receiving $8.5 million in total compensation for the latest fiscal year, with a four-year total compensation of $23.08 million.
  • The Three Mile Island accident is an accident that occurred in 1979 in a nuclear plant run by Metropolitan Edison. The plant was sold by GPU to AmerGen Energy Corporation in 1998. In 2011, it was owned by Exelon.
  • The 2003 North American blackout was attributed partly to FirstEnergy's failure to trim the trees around its high voltage lines in a certain sector of Ohio; heat and extreme power needs caused the lines to sag, coming into contact with the trees and causing flashover.[16]
  • The Pennsylvania Public Utility Commission voted on January 16, 2004 to investigate Metropolitan Edison, Pennsylvania Electric and Pennsylvania Power (the former GPU companies) because their service reliability "may have fallen below established standards".
  • On Friday, January 20, 2006, FirstEnergy acknowledged a cover-up of serious safety violations by former workers at the Davis-Besse Nuclear Power Station, and accepted a plea bargain with the U.S. Department of Justice in lieu of possible federal criminal prosecution. The plea bargain relates to the March 2002 discovery of severe corrosion in the pressure vessel of the nuclear reactor, contained within the plant's containment building. In the agreement, the company agreed to pay fines of $23 million, with an additional $5 million to be contributed toward research on alternative energy sources and to Habitat for Humanity as well as to pay for costs related to the Federal investigation. In addition, two former employees and one former contractor were indicted for purposely deceiving Nuclear Regulatory Commission (NRC) inspectors in multiple documents (including one videotape) over several years, hiding evidence that the reactor pressure vessel was being seriously corroded by boric acid. The maximum penalty for the three is 25 years in prison. The indictment also cites other employees as providing false information to inspectors, but does not name them.
  • In 2005, the NRC identified two earlier incidents at Davis-Besse as being among the top five events (excluding the actual disaster at Three Mile Island) most likely to have resulted in a nuclear disaster in the event of a subsequent failure.[17][18]


External links

  • FirstEnergy Corp. Web site
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