AKRON, Ohio, April 23, 2018 /PRNewswire/ -- FirstEnergy
Corp. (NYSE: FE) today announced it has reached an agreement in
principle with two groups of key creditors in the Chapter 11
proceedings of FirstEnergy Solutions (FES), its related entities
and FirstEnergy Nuclear Operating Company (FENOC) on a proposed
settlement of all potential claims among FE, FES and the creditor
groups. Collectively, the creditors in this agreement represent a
majority of the outstanding unsecured and secured debt obligations
of FES and its related entities, including the majority of
Bruce Mansfield certificate
holders.
On March 31, 2018, FES, its
subsidiaries and FENOC made voluntary Chapter 11 filings under the
United States Bankruptcy Code. FirstEnergy and its
distribution, transmission, regulated generation and Allegheny
Energy Supply (AE Supply) subsidiaries were not part of the
filing.
This agreement in principle is a significant step toward FES,
its related entities, and FENOC ultimately emerging from
bankruptcy. The settlement is intended to fully release
FirstEnergy and related parties from all claims. It provides
FES, its subsidiaries, and FENOC with assistance from FirstEnergy
on key business matters during the restructuring process. The
agreement also affirms FirstEnergy's previously announced
guarantees and assurances of certain FES employee-related
obligations, which include unfunded pension obligations and other
employee benefits, and provides for the waiver of certain
inter-company claims held by FirstEnergy.
The agreement is subject to approval by the FirstEnergy and AE
Supply boards of directors, the execution of definitive agreements
and certain other conditions, and – as to participation by FES, its
subsidiaries and FENOC – approval by their respective boards.
It also is subject to the approval of the Bankruptcy
Court.
The creditor groups also agreed to use their best efforts to
have the Official Committee of the Unsecured Creditors, as well as
any remaining key creditors, join the settlement by June 15, 2018. The complete terms of the
agreement are described in a court filing made today in the FES
Chapter 11 proceedings and in a disclosure on Form 8K, which will
be available at
http://investors.firstenergycorp.com/IRW/Docs.
FirstEnergy is dedicated to safety, reliability and operational
excellence. Its 10 electric distribution companies form one
of the nation's largest investor-owned electric systems, serving
customers in Ohio, Pennsylvania, New
Jersey, West Virginia,
Maryland and New York. The
company's transmission subsidiaries operate more than 24,000 miles
of transmission lines that connect the Midwest and Mid-Atlantic
regions. Follow FirstEnergy on Twitter @FirstEnergyCorp or online
at www.firstenergycorp.com.
Forward-Looking Statements: This news release includes
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 based on information
currently available to management. Such statements are subject to
certain risks and uncertainties and readers are cautioned not to
place undue reliance on these forward-looking statements. These
statements include declarations regarding management's intents,
beliefs and current expectations. These statements typically
contain, but are not limited to, the terms "anticipate,"
"potential," "expect," "forecast," "target," "will," "intend,"
"believe," "project," "estimate," "plan" and similar words.
Forward-looking statements involve estimates, assumptions, known
and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements, which may
include the following: the ability to successfully execute an
exit of commodity-based generation that minimizes cash outflows and
associated liabilities, including, without limitation, the losses,
guarantees, claims and other obligations of FirstEnergy Corp.,
together with its consolidated subsidiaries (FirstEnergy) as such
relate to the entities previously consolidated into FirstEnergy,
including FirstEnergy Solutions Corp.(FES), its subsidiaries and
FirstEnergy Nuclear Operating Company (FENOC), which have recently
filed for bankruptcy protection; the potential for litigation and
demands for payment against FirstEnergy by FES and FENOC or certain
of their creditors; the risks associated with the bankruptcy cases
of FES, its subsidiaries and FENOC, including, but not limited to,
third-party motions in the cases that could adversely affect
FirstEnergy, its liquidity or results of operations; the ability to
experience growth in the Regulated Distribution and Regulated
Transmission segments and the effectiveness of our strategy to
operate as a fully regulated business; the accomplishment of our
regulatory and operational goals in connection with our
transmission and distribution investment plans, including, but not
limited to, our planned transition to forward-looking formula
rates; changes in assumptions regarding economic conditions within
our territories, assessment of the reliability of our transmission
and distribution system, or the availability of capital or other
resources supporting identified transmission and distribution
investment opportunities; the ability to accomplish or realize
anticipated benefits from strategic and financial goals, including,
but not limited to, the ability to grow earnings in our regulated
businesses, continue to reduce costs and to successfully execute
our financial plans designed to improve our credit metrics and
strengthen our balance sheet; the risks and uncertainties
associated with litigation, arbitration, mediation and like
proceedings; the uncertainties associated with the deactivation of
our remaining commodity-based generating units, including the
impact on vendor commitments, and as it relates to the reliability
of the transmission grid, the timing thereof; costs being higher
than anticipated and the success of our policies to control costs;
the uncertainty of the timing and amounts of the capital
expenditures that may arise in connection with any litigation,
including New Source Review litigation, or potential regulatory
initiatives or rulemakings; changes in customers' demand for power,
including, but not limited to, changes resulting from the
implementation of state and federal energy efficiency and peak
demand reduction mandates; economic and weather conditions
affecting future sales, margins and operations, such as significant
weather events, and all associated regulatory events or actions;
changes in national and regional economic conditions affecting
FirstEnergy and/or our major industrial and commercial customers,
and other counterparties with which we do business; the impact of
labor disruptions by our unionized workforce; the risks associated
with cyber-attacks and other disruptions to our information
technology system that may compromise our generation, transmission
and/or distribution services and data security breaches of
sensitive data, intellectual property and proprietary or personally
identifiable information regarding our business, employees,
shareholders, customers, suppliers, business partners and other
individuals in our data centers and on our networks; the impact of
the regulatory process and resulting outcomes on the matters at the
federal level and in the various states in which we do business,
including, but not limited to, matters related to rates; the impact
of the federal regulatory process on Federal Energy Regulatory
Commission (FERC) regulated entities and transactions, in
particular FERC regulation of PJM Interconnection, L.L.C.
(PJM) wholesale energy and capacity markets and
cost-of-service rates, as well as FERC's compliance and enforcement
activity, including compliance and enforcement activity related to
North American Electric Reliability Corporation's mandatory
reliability standards; the uncertainties of various cost recovery
and cost allocation issues resulting from American Transmission
Systems, Incorporated's realignment into PJM; the ability to comply
with applicable state and federal reliability standards and energy
efficiency and peak demand reduction mandates; other legislative
and regulatory changes, including the federal administration's
required review and potential revision of environmental
requirements, including, but not limited to, the effects of the
United States Environmental Protection Agency's Clean Power Plan,
Coal Combustion Residuals, Cross-State Air Pollution Rule and
Mercury and Air Toxics Standards programs, including our estimated
costs of compliance, Clean Water Act (CWA) waste water effluent
limitations for power plants, and CWA 316(b) water intake
regulation; changing market conditions that could affect the
measurement of certain liabilities and the value of assets held in
our pension trusts and other trust funds, and cause us and/or our
subsidiaries to make additional contributions sooner, or in amounts
that are larger, than currently anticipated; the impact of changes
to significant accounting policies; the impact of any changes in
tax laws or regulations, including the Tax Cuts and Jobs Act,
adopted December 22, 2017, or adverse
tax audit results or rulings; the ability to access the public
securities and other capital and credit markets in accordance with
our financial plans, the cost of such capital and overall condition
of the capital and credit markets affecting us and our
subsidiaries; further actions that may be taken by credit rating
agencies that could negatively affect us and/or our subsidiaries'
access to financing, increase the costs thereof, letters of credit
and other financial guarantees, and the impact of these events on
the financial condition and liquidity of FirstEnergy Corp. and/or
its subsidiaries; issues concerning the stability of domestic and
foreign financial institutions and counterparties with which we do
business; and the risks and other factors discussed from time to
time in our United States Securities and Exchange Commission (SEC)
filings, and other similar factors. Dividends declared from time to
time on FirstEnergy Corp.'s common stock, and thereby on
FirstEnergy Corp.'s preferred stock, during any period may in the
aggregate vary from prior periods due to circumstances considered
by FirstEnergy Corp.'s Board of Directors at the time of the actual
declarations. A security rating is not a recommendation to buy or
hold securities and is subject to revision or withdrawal at any
time by the assigning rating agency. Each rating should be
evaluated independently of any other rating. These forward-looking
statements are also qualified by, and should be read together with,
the risk factors included in our filings with the SEC. The
foregoing review of factors also should not be construed as
exhaustive. New factors emerge from time to time, and it is not
possible for management to predict all such factors, nor assess the
impact of any such factor on our business or the extent to which
any factor, or combination of factors, may cause results to differ
materially from those contained in any forward-looking statements.
We expressly disclaim any obligation to update or revise, except as
required by law, any forward-looking statements contained herein as
a result of new information, future events or otherwise.
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SOURCE FirstEnergy Corp.