If state regulators approve outsiders to supply electricity in FirstEnergy Corp. territory after an auction in December, the firm doesn't expect to be hurt financially because it will use its power in its Pennsylvania territory or sell it on the open market for a profit.
Anthony Alexander, FirstEnergy chief executive, said yesterday the company will not take part in a Dec. 7 auction ordered by the Public Utilities Commission of Ohio.
Faced with the expiration of a state-imposed cap on electricity rates at the end of next year, FirstEnergy's proposal for a three-year rate freeze on electricity for 2.1 million Ohio customers will kick in if competitors' bids are too high. The utility owns Toledo Edison, the predominant power source in metro Toledo.
"We laid out our prices as part of the rate-stabilization plan," Mr. Alexander told analysts and investors during a conference call discussing FirstEnergy's third-quarter financial picture.
If state regulators allow other suppliers provide electricity in its territory, then FirstEnergy will consider the most profitable ways to use or sell the energy it produces in Ohio, he said.
Besides sending it to the east to serve customers in Pennsylvania, the utility will consider supplying homeowners and businesses through its FirstEnergy Solutions subsidiary and selling power wholesale to the winning bidders in Ohio, he explained.
Meanwhile, the utility said its profit shot up 96 percent to $299 million in the third quarter, on revenues of $3.5 billion, which were up 3 percent from the same period a year ago. The news sent its stock down 10 cents to $40.95 a share on the New York Stock Exchange.
On Wednesday, FirstEnergy revealed the U.S. Securities and Exchange Commission is conducting a formal investigation into the company's financial statements announced in 2003 and disclosures about the extended outage at the Davis-Besse nuclear plant.
The SEC began an informal inquiry in September, 2003, and this week subpoenaed the company for background documents and other information.
The SEC did not specifically indicate what it is concerned about or its timeline for the investigation, according to the company.
"FirstEnergy has cooperated fully with the informal inquiry and will certainly continue to cooperate fully with the formal investigation as well," said Richard Marsh, the company's chief financial officer and senior vice president.