By Tyler Arnold
The Center Square

https://www.thecentersquare.com/

A federal judge is allowing FirstEnergy Solutions to move forward with a bankruptcy plan after the company settled a labor dispute with two unions.

Judge Alan Koschik of the U.S. Bankruptcy Court for the Northern District of Ohio had put the approval on hold pending an agreement with the unions that represent workers at two of their power plants. FirstEnergy Solutions had threatened to sever the contracts as part of its bankruptcy plan in August.

Per the plan, FirstEnergy Solutions will also be breaking off from its parent company, FirstEnergy Corp. The company filed for bankruptcy in March 2018 so it could restructure its finances and operations.

“This is a landmark day in the history of our Company,” John W. Judge, the president and CEO of FirstEnergy Solutions, said in a news release. “We are now in a position to successfully conclude the Chapter 11 process and will emerge from the restructuring as a fully independent energy company well-positioned to continue serving the needs of our 800,000 Customers.”

Joyce Goldstein, the lawyer who represented the unions, told The Center Square via email that it was a good deal for the workers.

“This is a remarkable victory for workers and unions,” Goldstein said. “The court had ruled that the reorganization could not move forward without an agreement,” Goldstein said. “The agreement reached between the debtors and the unions means that the workers do not lose a penny on their pensions, their wages or any other benefits. In addition, the Debtors are paying for the union’s attorneys’ fees in fighting to achieve that outcome. This is a national success story – right there with the achievements of this past year in the teachers’ strikes and the Marriott strike, and hopefully, the GM strike.”

To maintain the operation of all of its plants, FirstEnergy Solution has sought government subsidies. The Ohio Legislature passed a $1 billion bailout plan for the company to keep two of its plants open: The Perry power plant in North Perry, Ohio and the Davis-Besse power plant in Ottawa County. The bailout will be paid for through increased costs for ratepayers.

Despite overwhelming support from both chambers of the Legislature, a group called Ohioans Against Corporate Bailouts has launched a referendum effort to repeal the subsidies, arguing that it damages competition.

An opposing group, Ohioans for Energy Security, has sued Ohioans Against Corporate Bailouts, claiming that the rate increase constitutes a tax; taxes are not subject to be changed via referendum. Ohioans Against Corporate Bailouts has argued that a rate increase in this instance is not a tax.

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.