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The Games Corporations Play: and How the People and the Environment Lose
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by Jim Sconyers, Chapter Chair | 2013

Once again, this too proves that Corporations are definitely NOT people!

Part One:  Patriot Coal: “Created to Fail?”
 
Patriot Coal was created by Arch Coal and Peabody Energy in 2007. Arch and Peabody Union miners east of the Mississippi became employees of the new Patriot company.  Among other provisions, Patriot took responsibility for the health benefits of thousands of retirees and their families. At the time, it appeared that this new company was bur-dened from the outset with impossible and inappropriate financial obligations.
 
Observers have used the term “created to fail” to de-scribe this awkward new child of Arch and Peabody. Not only did Patriot begin life with massive retiree benefits on its ledger, but it then went on to operate recklessly and rack up millions of dollars worth of clean water violations.
 
Were the UMWA and others prophetic? Or just astute and analytic? In any case, sure enough Patriot went bankrupt—as predicted. Then came many months in courtrooms  and across negotiating tables.
 
Foremost among the issues in the bankruptcy delib-erations were the company’s obligation for retiree benefits. These are critical to thousands of retirees in West Virginia and their families. 
 
Now the bankruptcy court judge, Judge Kathy Surratt-States, has made her decision on the Patriot bankruptcy. Here are a couple of points in her commentary:
 
• Blame the victim—“Unions generally try to bargain for the best deal for their members; however, there is likely some responsibility to be absorbed for demanding benefits that the employer cannot realistically fund in perpetuity.” In other words, the union is to be blamed for negotiating a good contract with the company.
• Message to union members—“Years of toil, per-severance and determination of miners past yielded the employment terms and conditions of miners today, but this does not matter where, as here, savings everywhere else have already been explored within reason and exhausted.” In other words, everyone else has sacrificed, now it’s your turn, regardless of what your contract with the company says.
• The union is at fault because it and the company agreed to a contract that gave better pay and benefits to union miners than non-union workers.—“Given the grave disparity between union and non-union pay and benefits pre-bankruptcy, the limitations placed on non-union labor that have been in place for years, and acceptance of the reality of the savings needed, the Court concludes that the UMWA-represented employees are not tasked to dispro-portionately shoulder the burden of Debtors’ bankruptcy.” 
• The bottom line—“This is not a union versus non-union evaluation; it is an evaluation of what is necessary for Debtors to emerge from bankruptcy as a viable company....”  In other words, the viability of Patriot trumps the lives and livelihoods of its workers.
 
The action components of Judge Surratt-States’ decision: 
 
1. Patriot can discard its supposedly binding contracts with the union.
2. Patriot will no longer provide the health benefits guaranteed for retirees and their families.


Part Two: First Energy: Playing a Classic Shell Game
 
Shell game: A game, usually involving gambling, in which a person hides a pea under one of three nutshells, then shuffles them around while spectators try to guess the final location of the pea.[www.thefreedictionary.com]  
 
First Energy, the huge energy conglomerate, has been playing the corporate version of the shell game. We, the company’s customers, stand to lose.

Here, in brief layperson’s terms, is an outline of the scheme. Warning: It is a twisted and convoluted narrative, but try to follow. Here are some abbreviations used to sim-plify the verbiage:
 
FE – First Energy, an Ohio corporation.
AES – Allegheny Energy Supply, an Ohio subsidiary of First Energy.
Mon Power– Monongahela Power, a West Virginia subsidiary of First Energy, and the electric company for northern West Virginia homes and
businesses.
 
Harrison Station is a large, aging coal-fired power plant near Clarksburg. Eighty percent of the plant is owned by AES. First Energy is trying to foist the plant onto Mon Power.
 
I know, you’re wondering, “Aren’t all these just parts of the same company? So FE is trying to make one FE subsid-iary sell to another FE subsidiary? Why?”
Here’s where it gets complicated.
 
Turns out FE and AES are Ohio companies, and Ohio has deregulated its electric power industry. So these Ohio companies have to scramble and work smart to make a profit—or maybe not.
 
What about Mon Power? West Virginia electric companies are still regulated, specifically by the Public Service Commission (PSC). And in West Virginia the electric com-pany has a monopoly in its service region, along with guaranteed profit rates.
 
I think you get it now! Of course FE would be ecstatic to unload the power plant onto Mon Power. Then the PSC will allow FE to raise rates—for the next 20+ years—to cover the $1 Billion-plus price tag. And hundreds of thousands of West Virginians would have no choice—pay up folks!
 
It’s the old shell game. Put the Harrison plant under the AES shell—shuffle the shells around—now you see it now you don’t—and presto! There the pea is, but now it’s under the Mon Power shell—gotcha!
 
You might be thinking, “Isn’t this all just a sham trans-action? Isn’t it all a paper chase? Doesn’t the plant still sit there and generate electric power?” Yes; yes; and yes. 
 
As my energy guru puts it, “All this accomplishes is to suck a billion bucks out of the wallets of West Virginians and put it into the pockets of FE shareholders.” It’s a slick scam if one can get away with it.

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