FirstEnergy to return $43M to Ohio customers

State regulators order payback for renewables overcharges

8/8/2013

COLUMBUS — Ohio utility regulators on Wednesday ordered FirstEnergy to credit $43.3 million back to customers after the company overcharged them for renewables purchases in Ohio’s developing alternative energy market.

The unanimous action by the Public Utilities Commission of Ohio for the first time puts a dollar figure on excess costs the Akron-based utility paid a subsidiary for renewable energy and then passed on to customers.

The company said it disagrees with the commission’s decision and plans to appeal.

“The ruling does not change the fact that purchasing the renewable energy credits was the only option available to us under Ohio’s clean energy law,” FirstEnergy spokesman Doug Colafella said in an email. “The decision suggests we should have ignored Ohio law and it penalizes us for following the law.”

An audit of the overcharges by Exeter Associates Inc. indicated FirstEnergy paid 15 times more than any other company in the country to subsidiary FirstEnergy Solutions to buy the credits it would use to help meet Ohio’s new renewable energy standard.

The standard requires utilities to provide 25 percent of their energy from renewable sources by 2025.

Portions of the audit were blocked from public view because of confidentiality claims by the company, and PUCO Chairman Todd Snitchler said Wednesday those figures will remain secret.

An analysis by the Natural Resources Defense Council had put the excess payments at between $96 million and $126 million.

“I can’t speak to how they arrived at that number, but we think this number is very much within the realm of what was appropriate,” Snitchler said.

Dan Sawmiller, with the Sierra Club’s Ohio Beyond Coal Campaign, commended the commission’s order but said public access is lacking in the case, “leaving customers in the dark about what types of renewables are being provided, where they are coming from and at what cost.”

Marty Berkowitz, a spokesman for the Office of Consumers’ Counsel, which represents Ohio ratepayers, said the office is barred from saying how much in overcharges it asked that FirstEnergy recoup for its 2 million customers.

“We are not allowed to reveal how much we asked for FirstEnergy to credit back to customers because FirstEnergy succeeded in its efforts to have the records sealed as secret,” he said. “Needless to say, we recommended that FirstEnergy be required to credit back much more of its charges to customers than what was ordered in today’s decision.”

Brian Kaiser, director of green jobs and innovation for the Ohio Environmental Council, said the commission did the right thing.

“We think FirstEnergy’s games with customers’ money need to stop,” he said.

Snitchler said it’s unlikely the specific scenario in the FirstEnergy case — which involved renewable energy credits, or RECs, purchased in 2009 to 2011 — would be repeated in today’s more well-developed market for solar, wind and other renewable energy sources.

But he said the order still is instructive to other utilities.

“This would certainly give a utility the opportunity to consider how they were going to procure those RECs to make sure that they were in compliance and didn’t run into a situation where they would be where we are here today,” he said.

Snitchler said he hopes lawmakers will take the ruling into account as they look to clarify the law.