Utility supplier FirstEnergy (FE) now faces the same disease that has infected competitors Exelon (EXC) and Entergy (ETR) : Its nuclear power plants are no longer financially viable.

In a conference call with analysts Wednesday, FirstEnergy CEO Chuck Jones didn't quell speculation that subsidiary FirstEnergy Solutions or its operating company that runs three nuclear facilities in Ohio and Pennsylvania could go through Chapter 11.

"I think it's highly unlikely we'll get the value of that business to a place where the book value is greater than the debt," Jones said of FirstEnergy Solutions. The subsidiary carries about $1.5 billion in book value, he added. It has about $3 billion in debt on its balance sheet, Securities and Exchange Commission Filings show.

One way or another, FirstEnergy will eventually rid itself of its nuclear assets. The company took a $9.2 billion impairment charge when it reported its fourth quarter earnings Tuesday and announced that it plans to exit the competitive power generation business by mid-2018. The massive charge meant that FirstEnergy lost $14.49 a share in 2016 on $14.6 billion in revenue.

"FirstEnergy trades at a discount to peers on price-earnings multiples, but appears less attractive on a sum of the parts," Goldman Sachs analyst Michael Lapides wrote in a research note. "We believe this discount will remain, especially given the overhang related to its competitive segment as EBITDA declines and leverage concerns mount."

FirstEnergy's best hope if it wants to make at least some of its nuclear portfolio look attractive may be the strategy that Exelon successfully pursued in both Illinois and New York: A lobbying effort for massive state subsidies.

Exelon successfully petitioned those state governments for hundreds of millions in Zero-Emission Credit (ZEC) payments which function as rewards for giving off virtually no carbon emissions. Politically dicey as it may be, nuclear energy remains clean.

Jones has asked Ohio lawmakers to consider paying ZECs to FirstEnergy's Davis-Besse plant near Toledo and its Perry plant near Cleveland, which would keep them alive for their next owner.

"We believe this legislation would preserve not only zero-emission assets, but jobs, economic growth, fuel diversity, price stability, and reliability and grid security for the region," he said on the call. "We are advocating for Ohio's support for its two nuclear plants, even though the likely outcome is that FirstEnergy won't be the long-term owner of these assets."

The other option is to simply close the plants, much like Entergy is doing with its Indian Point Energy Center near New York City. That facility is set to shut down by 2021.

The issue with a closure is that it will take time and money, neither of which are friends to FirstEnergy Solutions considering the state of its balance sheet.

Shares of FirstEnergy closed at $32.32 Friday, up 2.96%.

FE Chart FE data by YCharts

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