The nation's biggest power company is now based in Akron, but whether it's good or bad for Ohioans is a matter of perspective. After more than a year of regulatory wrangling, FirstEnergy Corp. and Allegheny Energy wasted no time tying the knot. The Akron company and the smaller southwestern Pennsylvania utility filed merger documents Friday - just 24 hours after the Pennsylvania Public Utilities Commission approved the stock-for-stock merger. Consumer watchdogs worry that a bigger FirstEnergy could more easily dominate wholesale as well as retail markets and ultimately run up prices. The Federal Energy Regulatory Commission disagreed. The commission reviewed arguments filed by the companies and consumer watchdog groups and concluded the merger would have no effect on competition. FirstEnergy's view is that Northeast Ohio has something to celebrate. And not just today. "In the long term, this is good news for Northeast Ohio because one of Northeast Ohio's businesses just got bigger," spokeswoman Ellen Raines said. For example? "The merger has provided us with even more resources to provide services to our customers. It gives us that many more line personnel and trucks to bring to bear when we have power outages." But even last week, Ohio Consumers' Counsel Janine Migden-Ostrander said she remained concerned that the merger would give FirstEnergy the power to manipulate markets. She noted that the Public Utilities Commission of Ohio opted not to oppose the merger or even investigate the issues surrounding it. "There was never a case in Ohio to deal with the FirstEnergy-Allegheny merger, so we really don't know what the impact, if any, could be on Ohioans," she said. "We, along with Maryland and West Virginia advocates, did ask federal regulators to resolve potential anti-competitive issues and to ensure residential customers are held harmless from any adverse rate impacts as a result of the merger." Attorney Ted Robinson of Citizen Power, based in Pittsburgh, maintained this week that FirstEnergy might be able to keep competitors out. FirstEnergy Solutions, a subsidiary of FirstEnergy Corp., owns the company's power plants and sells power to individuals, businesses and other utilities. The parent company operates the companies that distribute the power -- the Illuminating Co., Ohio Edison and Toledo Edison, in Ohio. The retail arm of FirstEnergy Solutions has locked up about 60 percent of residential customers here with long-term, discounted contracts. The company also obtained the business of the Northeast Ohio Public Energy Council, or NOPEC, which had used an out-of-state power supplier. That means consumers really have no choice. They either buy from FirstEnergy Solutions with a retail contract or from their FirstEnergy distribution company, which also buys the bulk of its power from FirstEnergy Solutions. Despite that, there was plenty of competition from outside power suppliers in FirstEnergy's most recent wholesale auction, an indication that competition is still working. FirstEnergy uses the auctions to obtain the power its Ohio companies distribute. FirstEnergy Solutions has been one of the bidders. Raines said that bringing Allegheny's newer coal-fired power plants under FirstEnergy's control bodes well for the company's ability to generate more power, more efficiently and more cleanly, the company contends. "When you operate a larger number of power plants as a single fleet, you rely more on the power plants with environmental control and on plants that can run more efficiently," Raines said. FirstEnergy's chief executive, Anthony Alexander, has alluded to that in analyst conferences, saying he intended to run Allegheny's bigger plants the way FirstEnergy has since deregulation began -- that is, flat out as they were designed to run. That could become more important within the next four years as the U.S. Environmental Protection Agency tightens regulations on pollutants such as sulfur dioxide and nitrogen oxides, forcing utilities to close many old small plants because cleaning them up would be uneconomical. With more than 6 million customers scattered over 67,000 square miles in seven states, the new FirstEnergy is in fact the largest utility in America. For now. Duke Energy and Progress Energy, both based in North Carolina, are on track to become one company serving more than 7.1 million customers before the end of the year. |