Mon Power and Potomac Edison Announce West Virginia Fuel, Purchased Power Cost Decision
Commission Also Approves Energy Efficiency and Conservation Programs
FAIRMONT, W.Va., Dec. 30, 2011 /PRNewswire/ -- Mon Power and Potomac Edison, subsidiaries of FirstEnergy Corp. (NYSE: FE), announced that the Public Service Commission of West Virginia has issued an order regarding the companies' adjustment of fuel and purchased power costs. The Commission's order approved a settlement agreement between the companies and the Consumer Advocate Division and Staff of the Public Service Commission of West Virginia and the West Virginia Energy Users Group.
As a result of the order, the monthly bill for a typical residential customer using 1,000 kilowatt-hours of electricity will increase about $3 a month to $99 starting January 1, 2012. However, even with the increase, rates for Mon Power and Potomac Edison residential customers are expected to remain about 18 percent below the national average.
Under a cost recovery clause established by the Commission in 2007, Mon Power and Potomac Edison customer bills are adjusted periodically to reflect upward or downward changes in the cost of fuel and purchased power. The companies' last request to recover costs for fuel and purchased power was in September 2009.
In the approved settlement, the parties have agreed that the utilities will recover in 2012 an additional $19.6 million or an approximate 1.7 percent overall increase, primarily reflecting rising coal prices over the past two years, with certain additional amounts to be recovered in future years. For Mon Power and Potomac Edison customers, coal prices represent the single largest component of the cost to produce electricity.
The Commission also issued an order approving two energy efficiency and conservation programs that will achieve 0.5 percent energy and demand savings for Mon Power and Potomac Edison over five years. The programs include a low-income residential efficiency program and incentives for commercial, government and industrial customers to install high efficiency lighting. The order directs the companies to file within five business days revised rates designed to recover $1.7 million of the program costs during 2012.
The increases are partly offset by $2.5 million of synergy savings directly resulting from the merger of FirstEnergy and Allegheny Energy, which closed in February 2011.
To help customers manage their bills, Mon Power and Potomac Edison offer budget plans, special payment plans, and access to energy assistance programs. For home energy efficiency tips, customers can check FirstEnergy's internet site at www.firstenergycorp.com or call our Customer Service Center at 1-800-255-3443 to request information.
FirstEnergy is a diversified energy company dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies comprise the nation's largest investor-owned electric system. Its diverse generating fleet features non-emitting nuclear, scrubbed baseload coal, natural gas, and pumped-storage hydro and other renewables, and has a total generating capacity of nearly 23,000 megawatts.
Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to: the speed and nature of increased competition in the electric utility industry, the impact of the regulatory process on the pending matters in the various states in which we do business including, but not limited to, matters related to rates, the status of the PATH project in light of PJM's direction to suspend work on the project pending review of its planning process, its re-evaluation of the need for the project and the uncertainty of the timing and amounts of any related capital expenditures, business and regulatory impacts from ATSI's realignment into PJM Interconnection, L.L.C., economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices and availability, financial derivative reforms that could increase our liquidity needs and collateral costs, the continued ability of FirstEnergy's regulated utilities to collect transition and other costs, operation and maintenance costs being higher than anticipated, other legislative and regulatory changes, and revised environmental requirements, including possible GHG emission, water intake and coal combustion residual regulations, the potential impacts of any laws, rules or regulations that ultimately replace CAIR including the Cross-State Air Pollution Rule (CSAPR) and the effects of the EPA's recently released MACT proposal to establish certain mercury and other emission standards for electric generating units, the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any NSR litigation or potential regulatory initiatives or rulemakings (including that such expenditures could result in our decision to shut down or idle certain generating units), adverse regulatory or legal decisions and outcomes with respect to our nuclear operations (including, but not limited to, the revocation or non-renewal of necessary licenses, approvals or operating permits by the NRC, including as a result of the incident at Japan's Fukushima Daiichi Nuclear Plant), issues that could result from our continuing investigation and analysis of the indications of cracking in the plant shield building at Davis-Besse, adverse legal decisions and outcomes related to Met-Ed's and Penelec's ability to recover certain transmission costs through their transmission service charge riders, the continuing availability of generating units and changes in their ability to operate at or near full capacity, replacement power costs being higher than anticipated or inadequately hedged, the ability to comply with applicable state and federal reliability standards and energy efficiency mandates, changes in customers' demand for power, including but not limited to, changes resulting from the implementation of state and federal energy efficiency mandates, the ability to accomplish or realize anticipated benefits from strategic goals, efforts, and our ability to improve electric commodity margins and the impact of, among other factors, the increased cost of coal and coal transportation on such margins, the ability to experience growth in the distribution business, the changing market conditions that could affect the value of assets held in FirstEnergy's nuclear decommissioning trusts, pension trusts and other trust funds, and cause FirstEnergy to make additional contributions sooner, or in amounts that are larger than currently anticipated, the ability to access the public securities and other capital and credit markets in accordance with FirstEnergy's financing plan, the cost of such capital and overall condition of the capital and credit markets affecting FirstEnergy and its subsidiaries, changes in general economic conditions affecting FirstEnergy and its subsidiaries, interest rates and any actions taken by credit rating agencies that could negatively affect FirstEnergy's and its subsidiaries' access to financing or their costs and increase requirements to post additional collateral to support outstanding commodity positions, LOCs and other financial guarantees, the continuing uncertainty of the national and regional economy and its impact on the major industrial and commercial customers of FirstEnergy's subsidiaries, issues concerning the soundness of financial institutions and counterparties with which FirstEnergy and its subsidiaries do business, issues arising from the recently completed merger of FirstEnergy and Allegheny Energy, Inc. and the ongoing coordination of their combined operations including FirstEnergy's ability to maintain relationships with customers, employees or suppliers, as well as the ability to successfully integrate the businesses and realize cost savings and any other synergies and the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect, the risks and other factors discussed from time to time in FirstEnergy's and its applicable subsidiaries' SEC filings, and other similar factors. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy's business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update any forward-looking statements contained herein as a result of new information, future events or otherwise.
SOURCE FirstEnergy Corp.
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