Akron-based FirstEnergy Corp., the parent of Toledo Edison, said it has filed a plan with the state that will help stabilize long-term pricing volatility in the electricity market, but the state’s top residential utility consumer agency responded with concern.
FirstEnergy said its three-year Electric Security Plan, which would establish electric rates for customers from June 1, 2016, through May 31, 2019, is part of a 15-year “Economic Stability Plan.” The utility said that 15-year plan would come with three years of “modest” increases for the average residential customer — the first year is proposed to be $3.50 a month, or $42 a year, and then goes down the next two years — while the last 12 years are projected to show savings for customers.
Charges, or credits, would affect all customers because they would be reflected in distribution charges that all customers pay.
The utility said it projects the program would save customers about $2 billion over its 15 years.
“Reliable, affordable electricity is critical to Ohio’s economic vitality and security,” FirstEnergy President and Chief Executive Officer Anthony J. Alexander said in a news release.
He said the plan would protect customers against volatility as future prices rise, and would preserve $1 billion in annual statewide economic benefits.
But Scott Gerfen, spokesman for the Ohio Consumers’ Counsel, the residential utility advocate, said his office is concerned after an initial review of the document.
He said that “1.9 million consumers paid billions of dollars to FirstEnergy for its transition to deregulated power plants under a 1999 Ohio law. Fifteen years later, FirstEnergy is again asking consumers to pay charges related to the power plants.
“Needless to say, we are concerned for consumers. We will be analyzing this new request and will make recommendations to the PUCO,” he said.
The proposed Electric Security Plan, filed late Monday afternoon with the Public Utilities Commission of Ohio, also would freeze distribution rates through May 31, 2019. It would provide up to $6 million per year in economic development funding for Ohio communities and energy-efficiency assistance to low-income customers during its three years.
Bill Ridmann, FirstEnergy vice president of rates and regulatory affairs, said the plan would protect customers from the price volatility by having the utility purchase power from the Davis-Besse nuclear power plant and the W.H. Sammis power plant — both owned by FirstEnergy Solutions — and the Ohio Valley Electric Corp., jointly owned by several utilities, including FirstEnergy.
The purchased power then would be sold on the wholesale markets. Customers would receive either a credit or a charge, depending on whether there’s a profit or a loss on the sale of electricity, the company said.
When asked if customers were being forced to take pricing risks, Mr. Ridmann said he believes customers are getting the benefit.
“We’ve seen price volatility earlier in January in terms of the polar vortex and saw volatility in September,” he said. “We see increased pricing hitting our customers over the long term.”