FirstEnergy adds more cost-recovery adjustments

Although FirstEnergy Corp. says customers should not see much change in their bills, a new rate plan approved for the utility differs from past ones in that it will have more cost-recovery adjustments added to its base electricity delivery rate.

For example, the plan approved this week by state regulators allows Toledo Edison's parent company to collect from all of its customers $100,000 in 2012 and $200,000 in 2013 to recover the cost of energy-efficiency upgrades it provided to several Lucas County buildings.

These are labeled "riders" in the bill, which had been folded into the base rate in the past, said Mark Frye, an energy specialist at Palmer Energy of Toledo and chief consultant to the Northwest Ohio Aggregation

Coalition. "We used to get meat, vegetables, and salad all in one price. We're at a la carte now," Mr. Frye said.

Ohio Consumers' Counsel Janine Migden-Ostrander has objected to increased use of riders by the Public Utilities Commission of Ohio, saying there's no way to determine whether the utility is justified in making expenses it later will try to collect.

Mr. Frye said there are methods the state regulators use to determine whether the costs are legitimate.

For example, improvements the utility makes to upgrade its wires or grid system can be recovered through a rider. But Ellen Raines, a FirstEnergy spokesman, said that rider just replaces one about to expire soon, meaning customer bills won't be affected.

"Under the traditional rate-making process, you went in and asked for a rate increase," she said. But with rates stabilized, the riders will allow the utility to collect expenses it occurs on a quarterly basis through May, 2014."

Ms. Raines said it will mean the company won't ask for rate increases as often.

Overall, Lucas County Commissioner Pete Gerken said, the rate plan is good. The $300,000 FirstEnergy provided to Lucas County - and will recover through a rider - was for energy-efficiency upgrades at several county buildings, including the jail and court buildings.

The upgrades will save the county money in the long run and "it's $300,000 we won't have to spend," Mr. Gerken said.

The rate plan has other pluses, he added. A fund that provides aid to low-income customers was increased from $2 million a year to $4 million.

FirstEnergy will spend up to $3 million in its Toledo Edison service territory to aid economic development and job retention. The money, which isn't recoverable through a rider, will provide hookups or power substations to help firms develop or expand.

The plan also provides auto plants using more than 45 million kilowatt hours, such as the Chrysler Group LLC's Toledo Assembly complex and General Motors Co. Toledo Powertrain plant, with usage discounts to be paid for by a rider charged to customers in FirstEnergy's territory.

Toledo Edison has about 310,000 customers and its residential customers pay an average monthly bill of $97 based on 750 kilowatt hours of usage.

Mr. Gerken said the fact that rates under the new plan will continue to be set by a power auction means customers should see stable or even lower rates because energy prices are down with the sluggish economy.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.