Columbus -- FirstEnergy residential customers would have to pay about $3 more a month on their utility bills, under a rider OK'd by state regulators Oct 12.
The Public Utilities Commission of Ohio rejected a larger rider sought by the company, opting instead to allow $132.5 million annually, plus taxes, to be collected from customers over the next three years, with the possibility of a two-year extension. PUCO, in a released statement, said the plan would "provide FirstEnergy with an infusion of capital so that it will be financially healthy enough to make future investments in grid modernization."
FirstEnergy had sought a different setup, with a $558 million rider collected annually for eight years, according to PUCO.
FirstEnergy said it was reviewing the decision and considering what to do next.
"Today's decision is disappointing for our customers," Charles E. Jones, the company's president and chief executive officer, said in a released statement. "While we clearly demonstrated to the PUCO what is essential to ensure reliability for customers in the future, the amount granted is insufficient to cover the necessary and costly investments. The decision also fails to recognize the significant challenges that threaten Ohio utilities' ability to effectively operate."
Environmental advocates and one business group were critical of the outcome.But environmental advocates and one business group were critical of the outcome.
"For years, FirstEnergy doubled down on dirty energy and led the effort to kill Ohio's clean energy standards, which made them less competitive in today's market," Trish Demeter, managing director of energy programs for the Ohio Environmental Council, said in a released statement. "Now their customers will be on the hook for millions of dollars for mistakes the company made while Ohio loses jobs as we become less competitive in an energy market that is favoring cleaner alternatives. Ohioans deserve better than this. It's past time for our elected leaders to get serious about putting Ohio back on track to be a clean energy leader."
And Eric Burkland, president of the Ohio Manufacturers Association, said the rider amounts to "customers paying to prop up the finances of a failing company."
He added in a released statement, "If implemented, the rider essentially will serve as another new tax, potentially costing families and businesses $1 billion, while also setting a precedent for the PUCO to grant above-market customer charges to the state's other utilities to bolster utilities' financials. These unwarranted new costs will put another strain on the budgets of families, particularly those least advantaged, and will harm the competitiveness of businesses, especially those that are energy intensive."
In late March, PUCO signed off on a controversial profit-guarantee plan for FirstEnergy, written to help subsidize the operation of aging power plants in coming years. That plan included provisions for the utility to modernize the electric grid, with commitments to invest in renewable energy.
But federal regulators blocked the plan, pushing the company and PUCO back together to hash out a modified deal.
PUCO Chairman Asim Haque said the larger rider proposed by FirstEnergy as part of subsequent discussions was "not in the public interest."
Commissioner M. Beth Trombold said the order approved Oct. 12 "provides a needed incentive to the companies to focus on innovation and resources on grid modernization Our grid uses technologies that date back to Thomas Edison, but our grid is now tasked with integrating new forms of power generation to be delivered and used in new ways."
Commissioner Lynn Slaby, in a written statement filed as part of PUCO's decision, noted that the overall plan would prompt FirstEnergy to maintain its corporate headquarters in Akron.
"The loss of a company of this size would have a significant economic impact on both the local area and the entire northern portion of the state of Ohio," he wrote. " At least one expert in this case testified that the total economic impact associated with the headquarters is $568 million each year."
He added, "We have the responsibility to assure the people of Ohio have safe, reliable electric service at an affordable price. This requires us to make every effort to balance the pressures of providing sufficient revenues to the companies while keeping the cost to all classes of customers at a minimum."
The Oct. 12 PUCO vote was unanimous among the four members present. Commissioner M. Howard Petricoff was not on hand for the meeting, though he would have had to recuse himself on the FirstEnergy vote, said Matt Schilling, a PUCO spokesman.
Marc Kovac is the Dix Capital Bureau Chief. Email him at email@example.com or on Twitter at OhioCapitalBlog.