Top state court dismisses complaint against utility regulators

3/22/2001

COLUMBUS - The Ohio Supreme Court yesterday dismissed a complaint from a consumer group that accused state regulators of violating the law by approving FirstEnergy Corp.'s customer choice plan last year.

In a 5-1 vote, the court agreed with the Public Utilities Commission of Ohio that said Citizen Power of Pittsburgh did not appeal PUCO's decision properly.

Citizen Power said PUCO violated state law by allowing FirstEnergy to count its unregulated subsidiary - FirstEnergy Services - to meet the requirement that 20 percent of its customers switch to another supplier by 2003. If FirstEnergy fails, it would forfeit $500 million in stranded costs.

Stranded costs are the investments, such as nuclear power plants and other debts that utility officials say they cannot recover in a competitive market. FirstEnergy is the parent company of Toledo Edison, Illuminating Co. of Cleveland, Ohio Edison, and its Pennsylvania Power Co. subsidiary.

David Hughes, executive director of Citizen Power, said: “They're using a stupid technicality to avoid dealing with the substantive problems with FirstEnergy's transition plan, which is you don't have any choice.”

Ralph DiNicola, a FirstEnergy spokesman, said state rules say customers who switch to FirstEnergy Services can be counted as part of the 20 percent.

“It did not make sense for the state of Ohio to allow subsidiaries of out-of-state utilities to compete in Ohio's deregulation plan and bar the subsidiaries of Ohio's utilities from competing,” he said.