Allegheny Power 2015 Annual Report Download - page 7
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5
We continue to execute a conservative
sales and generation strategy that
offers less risk to the company.
To achieve this goal, our FirstEnergy
Solutions subsidiary continued to
restructure its sales portfolio to reduce
our exposure to weather-sensitive
demand and ensure we don’t sell more
power than we produce. A larger
portion of our generation is kept in
reserve to minimize our financial risk
when energy prices increase and ensure
power is available to sell when market
conditions are favorable.
We’re maintaining our support of
governmental aggregation and other
higher-margin sales while pursuing
wholesale opportunities that align
with our generation portfolio. We also
remain committed to economically
dispatching our fleet and operating
our units with greater flexibility.
FirstEnergy Nuclear Operating Company
(FENOC) reached a significant milestone
in 2015 when the Nuclear Regulatory
Commission approved a 20-year
license extension for the Davis-Besse
Nuclear Power Station, allowing the
unit to operate until 2037. In addition,
improved reliability and outage
execution enabled FENOC to produce
approximately 1 million megawatt-hours
over its original plan for the year, further
improving commodity margin.
PJM Interconnection’s new Capacity
Performance product had a positive
impact in more properly valuing
essential and highly reliable baseload
generating resources. Capacity auctions
held in August and September of 2015
are expected to improve revenues by
$1.1 billion from June 2016 through
May 2019. However, markets continue
to fall short of reflecting the true cost of
operating our baseload power plants.
LOWERING RISK IN OUR
COMPETITIVE BUSINESS
MEETING OUR ENVIRONMENTAL
COMMITMENTS
In 2015, we continued to make progress
to improve the environmental performance
of our operations.
Our proposed Ohio ESP includes a goal
to reduce carbon dioxide emissions by
at least 90 percent below 2005 levels
by 2045 – exceeding President Obama’s
goal of achieving economywide reductions
of 80 percent or more by 2050.
The Clean Power Plan called for
individual states to develop plans for
meeting the U.S. Environmental Protection
Agency’s state-specific emission
reduction goals. However, on Feb. 9,
2016, the U.S. Supreme Court granted
a petition from 27 states and other
stakeholders to halt enforcement of the
Clean Power Plan’s final rule until after all
legal challenges are resolved.
FirstEnergy submitted extensive
comments before the rule was finalized,
and we’re continuing to engage federal
and state policymakers on issues
related to our ongoing efforts to
ensure the availability of clean, reliable
and affordable energy resources for
customers.