Energy Company Considers Ending Union Contract After Receiving Bailout

by Tyler Arnold


After the Ohio state legislature approved about $1 billion worth of subsidies for FirstEnergy Solutions, the energy company might end its union contract for workers at one of the plants that needed the bailout to continue running.

As part of its bankruptcy plan, FirstEnergy Solutions may end its labor deal with workers at a few plants, including the Perry nuclear power plant, which ratepayers are subsidizing to keep open. The plant, which employs about 700 people, was set to be decommissioned by 2021 if the subsidies had not passed.

The union for the other plant benefitting from the subsidies, the Davis-Besse nuclear power plant, reached an agreement with FirstEnergy Solutions.

“The Company has been negotiating with the unions in good faith since March and has signed framework agreements with unions at two of the three plants in Ohio,” FirstEnergy Solutions said in a statement.

“The framework agreements provide that the reorganized company will provide employees with all of the same employee benefits contained in the current CBAs, other than the pension benefits currently provided by FirstEnergy Corp. through its pension plan,” the statement read. “The framework agreements address the replacement of such pension plan benefits.”

FirstEnergy Solutions will continue to negotiate with unions at the Perry power plant and intends to reach an agreement, according to the statement.

Greg Lawson, a research fellow at The Buckeye Institute, told The Center Square via email that this announcement reinforces his view that subsidies are a bad policy. The Buckeye Institute is a free-market think tank based in Ohio that testified against the bailout.

“Generally speaking, businesses can change course when they want or need to do so,” Lawson said. “But undoing a bad law once it is passed is an extremely cumbersome process. This is why policymakers need to be so careful before passing bad legislation. In the future, legislators should look at this situation as an example of how easy it is for there to be unintended and undesired consequences when a bailout is enacted.”

Immediately after the energy subsidies were signed by the governor, a coalition group called Ohioans Against Corporate Bailouts sprung up to push for a ballot initiative that would reverse the legislation that authorized the subsidies. The coalition filed a summary petition last week after attaining 2,866 signatures.

The coalition seeks to get the initiative on the 2020 ballots. They will have to have the language approved and receive about 266,000 signatures by October 21 of this year.

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Tyler Arnold reports on Virginia and Ohio for The Center Square. He previously worked for the Cause of Action Institute and has been published in Business Insider, USA TODAY College, National Review Online and the Washington Free Beacon.





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