Dear Power4School Member:
A number of questions recently have arisen from news articles regarding the possibility that First Energy Solutions (FES), the Power4Schools (P4S) provider of electricity for P4S districts, might soon file for bankruptcy protection. As you know, First Energy Solutions (FES) is under contract to supply electricity to most P4S districts through December 2019.
Given the recent news and questions, we want to assure you that a FES bankruptcy filing will not automatically negate the P4S contract or FES’s responsibility to provide electricity to P4S districts through December 2019. However, in the event that FES doesn’t fulfill its responsibility to provide electricity to P4S districts, the local utilities, Ohio Edison, Toledo Edison and CEI, will provide electricity to districts.
In addition, P4S holds two “letters of credit” from FES totaling over $1.8 million, which were established pursuant to the P4S contract to handle situations where FES could not fulfill its contractual responsibilities. P4S intends that the $1.8 million will be utilized to reimburse districts for any potential rate increases that might occur as a result of a switch to Ohio Edison, Toledo Edison and CEI.
Further, in the event that FES defaults on its responsibility, P4S will immediately begin the process of seeking a new supplier to replace FES through the remainder of the contract period. While we anticipate that a new supplier will provide competitive prices, P4S expects that the “Letter of Credit” will be available to help protect P4S districts in the event of a financial loss.
This entire situation will not require any action at the district-level. We will keep you apprised of developments and will be prepared to take immediate action in the event that FES defaults on its contract. We are also seeking a supplier for a new contract period beginning in January 2020.
P4S will continue to serve as a trusted advocate, leveraging the strength of BASA, OASBO, OSBA, the OSC and the strength of over 250 school districts, to provide you with the best possible service, the best price for electricity and best representation of the needs of your community.
Thank you for your support and attention to this matter.