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FirstEnergy officials say they'll appeal, ask for rehearing or go to high court
By Betty Lin-Fisher
Beacon Journal business writer
Published on Thursday, Jan 08, 2009
Ohio Edison customers could see a temporary decrease in electricity rates under action taken by the Public Utilities Commission of Ohio on Wednesday.
But not if the Akron-based parent of the utility has anything to say about it. After the ruling, FirstEnergy Corp. officials said the company was considering all of its options, including appealing to the PUCO, a motion for rehearing with the commission or going to the Ohio Supreme Court.
FirstEnergy is still awaiting a decision by the PUCO to determine its long-term electricity rates as of Jan. 1 when Ohio's electricity regulation was restructured. There were several moves in late 2008 between the utility and commission. In late November, the PUCO rejected FirstEnergy's proposed market-based rate plan. Then right before the holidays, the PUCO modified the utility's Electric Service Plan offer, which the utility then withdrew. At the same time, FirstEnergy filed an application for a rehearing on the market-based rejection and was required to refile its current rates.
However, instead of adopting the utility's current rates, the PUCO modified the rates to terminate what were called regulatory transition charges for Ohio Edison and Toledo Edison. Those charges were set to expire on Dec. 31 and consumer advocates, including the Ohio Consumers' Counsel, had urged the commission to allow those charges to expire.
Regulatory transition charges were implemented to cover expenses not fully recovered by utilities as Ohio attempted to move from a fully regulated market to a competitive market.
Ohio Consumers' Counsel spokesman Ryan Lippe said the agency was pleased that the PUCO allowed the extra charges to expire.
''We're still waiting for a permanent plan . . . but in the interim, there'd be a net benefit for customers and that's what they deserve,'' said Lippe.
FirstEnergy spokeswoman Ellen Raines said the commission failed in its responsibility to protect customers and uphold the law of Ohio with its ruling.
''Today's ruling jeopardizes service and reliability provided by Ohio utilities because it effectively denies them adequate revenue,'' said Raines.
''This is particularly true in light of the fact that the companies are buying power on the open market in accordance with federal law at a cost above the rates that have been approved by the commission,'' she said.
The law says without an authorized electric security plan or market-rate offer, current rates remain in effect, Raines said.
The company does not know the financial impact the end of the regulatory transition charges would have on the company. FirstEnergy has not calculated how much cheaper the average electric bill would be for Ohio Edison customers based on the ruling, Raines said.
The utility will be asking for a motion to stay the ruling, which would immediately suspend the PUCO's order. The PUCO's order is retroactive for rates starting Jan. 1.
Raines said the implications
of the PUCO's orders are serious.
''It's really tempting to say 'Great news, bills are going down.' This has potentially very serious implications for our utility companies,'' said Raines. ''Their costs recently went up as a result of the competitive bid process. Now we have an order that could reduce their revenues. It's a serious issue that goes beyond customers saving on monthly bills. We think customers are just as interested in having reliable service. We'll have to take a hard look at those issues in light of this order.''
Betty Lin-Fisher can be reached at
330-996-3724 or blinfisher@
thebeaconjournal.com.
Ohio Edison customers could see a temporary decrease in electricity rates under action taken by the Public Utilities Commission of Ohio on Wednesday.
Get the full article here.
Comments
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Akron, Oh
Posted 08:00 AM, 01/08/2009
Thanks Ohio Edison....
In an already dead economy you continue to draw every ounce of blood you can.
WAKE UP !!!
Give the people some sort of break...
Posted 11:34 AM, 01/08/2009
Poor First Energy / Ohio Edison. I guess some executives will have to take a pay cut:
Tony Alexander - $15,583,672 in 2007
Richard Grigg - $$4,160,158 - 2007
Mark Clark - $3,639,120 - 2007
Richard Marsh - $3,348,979 - 2007
(as reported in "Crains")
First Energy isn't a utility! It's a polictical machine!
GO OCC!!!!!!!
Rootstown, Oh
Posted 11:57 AM, 01/08/2009
This is a long festering issue ready to explode and will impact all of us more than ever. The PUCO in Columbus is stabbing Northeast Ohio in the back. First Energy has endured years of submitting to PUCO stagnant rates, costly regulations, orders, and quirky requirements in Ohio, despite rising costs to do business, that it has depleted their supply of good quality workers to the point we are now seeing dramatic losses in quality of service and service restorations. To overcome differences between rising costs and reduced income, they have not hired and trained enough new people to replace those who have retired. With further reductions in rates and ever increasing reporting requirements, current over-loaded workers are ready for early-outs. Cutting rates now will only force more people to jump ship due to additional overload and further deplete service reliability to all of us. First Energy will be unable to replace employees due to loss of further income. This will impact economic growth throughout Northeast Ohio as current industry will be unable to sustain growth and new industry will be unwilling to build operations in Northeast Ohio. Northeast Ohio can Thank PUCO for turning their back on us after they have stabbed us. Thank you PUCO...you have just begun the death of Northeast Ohio and our once proud work force that helped build NEO to be known as "The Best Location In The Nation".
Posted 03:07 PM, 01/08/2009
Neovet
Ohio Edison put a rate freeze into effect back in the mid 90's on their own in exchange for several longer term incentives. Believe me, the rate freeze did not lower profits! This was done during the "transition" to an unregulated industry. As we all know that noble experiment went nowhere.
I agree that the PUCO is part of the problem but First Energy welcomes lower electric usuage. How could they ever get approval to build a new plant in Ohio if demand were to exceed supply?
In the 80's and 90's Ohio Edison had an entire sales force out selling all electric home and electric motors and furnaces using rebates and special programs. Only in the early 2000's did they realize that rising demand could not be met if growth continued on the same path.
They're trying to lower demand by raising rates all because of the games being played by the utilites and the PUCO and state government.
Just watch. As soon as they get what they want, new jobs will flow like water. It's all a political game and FE has experts in the trenches.
Rootstown, Oh
Posted 06:32 PM, 01/08/2009
To overcome the current rate reduction FE's "experts in the trenches" will have to pull a big one. PUCO regulations and State Laws have strapped utility operations. They no longer can be "The good neighbor". As a student of economics, I see "politics" and "being a good neighbor" leaving for the sake of survival, thanks to the PUCO and their political cronies. New jobs always flow in any organization when income exceeds costs. If those costs exceed income, politics and being a good neighbor suddenly are expendable for the sake of the bottom line. This will cost all of us. Each and every one of us.
Cuyahoga Falls, Oh
Posted 11:21 PM, 01/08/2009
Hm...I wonder just how much money Kent State University saves over the University of Akron, given the fact it doesn't have to rely on Ohio Edison for its electricity?
