Commissioner Bernard L. McNamee Statement
February 14, 2020
Docket No. EC19-123-000
Dissent Regarding First Energy Solutions Corp., Frist Energy Generation, LLC, First Energy Nuclear Generation, LLC, First Energy Generation Mansfield Unit 1 Corp., Avenue Capital Management II, L.P.
Today’s order authorizes a proposed transaction involving Avenue Capital Management II, L.P.’s and Nuveen Asset Management LLC’s acquisition of indirect equity interest in FirstEnergy Solutions Corp., FirstEnergy Generation, LLC, FirstEnergy Nuclear Generation, LLC, FirstEnergy Generation Mansfield Unit 1 Corp. (Debtor Applicants). I am dissenting because I believe our approval is premature.
The proposed transaction is part of a larger Reorganization Plan filed by the Debtor Applicants in the Bankruptcy Court in the Northern District of Ohio, and subject to two pending appeals in the United States Court of Appeals for the Sixth Circuit. The first appeal raises questions related to the rejection of certain wholesale power contracts, including an agreement with Ohio Valley Electric Corporation (OVEC), and the Commission’s jurisdiction over the rejection of those contracts.1
The second appeal raises questions about the Commission’s jurisdiction to address rate changes provided for in the Reorganization Plan.
The outcome of these appeals could affect the proposed transaction. Indeed, the Restructuring Support Agreement provides,“[i]f an adverse ruling in the PPA Appeal Proceeding occurs prior to the Effective Date, the Debtors may be unable to comply with the terms of the Plan Term Sheet, which provides that in no event shall either Reorganized FES or New FES assume the OVEC ICPA.” 2
In my opinion, the Commission should wait until it has received the benefit of further guidance from the courts. FPA section 203(a)(5) expressly permits the Commission to toll this proceeding an additional 180 days for good cause and I would have employed that provision here.
For these reasons, I respectfully dissent.