Dive Brief:
- FirstEnergy Solutions filed a statement with Ohio's Public Utilities Commission (PUC) saying that a one-off fee passing the high costs of distribution and supply this winter onto customers is standard practice and would be of benefit to rate payers.
- The fee was set for $5 to $15 for residential customers, but FirstEnergy scrapped it several weeks ago due to public outrage. A fee of 1-3% of total utility bills will still be applied to commercial customers. The Ohio PUC launched an investigation into the fees after receiving numerous complaints from FirstEnergy customers.
- Without the fee, uncertainty in the company's ability to deliver rises, the company said, and is accentuated by the increasing price of electricity supply. This will ultimately result in higher rates for consumers regardless of whether this fee is charged, said the utility. One-time charges to cover unexpected high costs "is a standard retail electric industry practice and is in no way unfair, misleading, deceptive or unconscionable,” FirstEnergy said.
Dive Insight:
FirstEnergy sought to pass weather-related costs to rate payers after this year's particularly harsh winter, which saw demand rise and electricity supply costs go up across the country. The competitive electricity supplier contends that regulated utilities in the state can pass such fees if approved by the PUC, and retail providers should have the same freedom. One such example from last year was the successful request by regulated utility American Electric Power, allowing them to recover $57.5 million in extra costs sustained due to 2012 storms. FirstEnergy claims it was a lack of customer education on how such extra costs would be dealt with that was the root of the issue, not their business practice.