Ohio High Court Upholds FirstEnergy Surcharge

The Ohio Supreme Court unanimously voted on March 18 to uphold the process that was used by the Public Utility Commission of Ohio (PUCO) to set rates in the service territory of Toledo Edison parent FirstEnergy (Docket No.14-1297-EL-SSO). The utility serves 2.2 million ratepayers statewide.

Industry pundits already had predicted that the March 31 PUCO settlement – which effectively would allow the utility to protect its unprofitable operations by increasing what it charges for the power from the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio; the coal-fired W.H. Sammis Plant in Stratton, Ohio; and a portion of the output of Ohio Valley Electric Corporation (OVEC) coal-fired units in Gallipolis, Ohio, and Madison, Indiana – would be appealed.

Under the terms of the settlement, customers would pay a surcharge for power from the aging plants, even when less-expensive power, such as natural gas, is available. The surcharge would be based on estimated power production costs that the company submitted in its filing with the PUCO more than 18 months ago.

Among other things, The Blade Columbus Bureau reported, the Environmental Law and Policy Center and the Northeast Ohio Public Energy Council, a consumer aggregator serving the Cleveland area, had argued that the PUCO failed to spell out why each of the conditions in FirstEnergy’s current Electric Security Plan was better for consumers than if the utility had to buy electricity in an open competitive market. But the high court disagreed.

We will not reverse an order of the commission unless the party seeking reversal shows that it has been or will be harmed by the order,” wrote Chief Justice Maureen O’Connor.(Slip Opinion No. 2016-Ohio-3021) “[The Environmental Law and Policy Center, one of the appellants] has not shown that it was prejudiced by the allegedly incomplete application in any way. And for that reason, we will not reverse the decision of the commission.”

The plan had been widely challenged because, consumer advocates say, the nuclear- and coal-fired plants cannot offer competitively priced power – and that customer surcharges for the generation from those units would be equivalent to a bailout worth billions to FirstEnergy.

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