FirstEnergy – an investor-owned utility that serves 2.2 million ratepayers in the Buckeye State –filed (Docket No. 14-1297-EL-SSO) with the Public Utilities Commission of Ohio (PUCO) on May 2 for modifications to its recently approved Electric Security Plan (ESP IV) in order to protect customers from future retail price increases.
The request seeks to allow the FirstEnergy Ohio utilities – Ohio Edison, Cleveland Electric Illuminating and Toledo Edison – to use a rate mechanism to protect customers against long-term price increases and volatility by applying credits or charges to monthly electric bills.
Customers would receive credits or charges on their monthly electric bills based on the projected plant cost calculations and electric output contained in the recently approved ESP IV. Based on this information, the plan is expected to save customers hundreds of millions of dollars during its eight-year term, between June 1, 2016 and May 31, 2024; and the credits or charges would be reviewed by the PUCO, both quarterly and annually.
“The benefit of locking in the cost and generation assumptions eliminates concerns of certain parties related to extended outages, capital spending levels, operating costs exceeding projections, plant retirements, whether or not costs are legacy costs, and environmental compliance risks and costs,” the company said in its filing.
If approved, First Energy Ohio states, the modified ESP IV “would preserve the comprehensive benefits contained in the original plan .”
The utility pledged, “The companies will remain obligated to fulfill the remaining terms, conditions, and commitments set forth in Stipulated ESP IV, as approved. And the multiple quantitative and qualitative benefits of Stipulated ESP IV remain unaffected, such as the $100 million risk sharing mechanism, the grid modernization and resource diversification initiatives, the base distribution rate freeze, programs to preserve and enhance rate options for customers, and support for retail competition. Moreover, the commission-ordered mechanism limiting average customer bills will provide additional customer protections.”
Since the proposal is based almost entirely on evidence in the record at the PUCO, the FirstEnergy Ohio utilities are seeking a decision on their request by May 25.