AKRON, Ohio, April 13, 2012 /PRNewswire/ -- FirstEnergy Corp.'s (NYSE: FE) Ohio utilities filed an application with the Public Utilities Commission of Ohio (PUCO) to essentially extend their current Electric Security Plan (ESP) for two more years.
If approved by the PUCO, the extension would allow the FirstEnergy Ohio utilities – Ohio Edison, Cleveland Electric Illuminating and Toledo Edison – to establish electricity prices for their customers through May 31, 2016. The current ESP, which ends May 31, 2014, has resulted in price certainty as well as more than $10 million in annual economic development funding and low-income assistance to FirstEnergy's utility customers and communities in Ohio.
Since the plan took effect last June, electric generation rates for non-shopping customers have already dropped by nearly 9 percent through the use of competitive auctions for securing electricity supply.
"Ohio utility customers are benefiting from affordable electric rates that reflect competitive market prices," said Anthony J. Alexander, President and Chief Executive Officer at FirstEnergy. "By extending our current ESP, we can continue to deliver the benefits gained from this successful model, as well as take advantage of some additional opportunities to help our customers save money in the years ahead."
The Ohio utilities are seeking PUCO approval by May 2 to position the company to provide additional megawatts of PJM-qualified energy efficiency and demand response resources into the May 7, 2012 PJM capacity auction for the 2015-2016 planning year. Demand response contracts provide financial incentives for electricity customers who agree to reduce their electric consumption during periods of peak demand, or in response to market prices. By extending their ESP, FirstEnergy's Ohio utilities would be able to bid these resources into the PJM auction for 2015-2016.
Additional new benefits include:
- Conducting additional power auctions to secure generation supply over a longer duration of time to mitigate any potential price spikes for FirstEnergy Ohio utility customers who do not switch to a competitive generation supplier. Conducting additional auctions over a longer time period helps to shield customers from price volatility by blending higher-year prices with lower-year prices.
- Stretching out the recovery period for costs associated with purchasing renewable energy credits mandated by Senate Bill 221. This will reduce the monthly renewable energy charge for all FirstEnergy Ohio utility customers by spreading out the costs over the extended ESP period.
"Our proposal will allow our customers to shop for an electricity supplier at market-based prices for energy and capacity," Alexander said. "It also offers additional benefits, including support for low-income customers and the ability to reduce the demand for electricity across our system by deploying energy efficiency and demand response resources throughout the extended period."
Today's filing reflects the diverse interests and concerns of more than 20 signatories, including parties that represent residential, low-income, commercial and industrial customers, as well as competitive retail electric suppliers, schools and hospitals. It also continues other substantial benefits from the current ESP, including:
- Freezing current base distribution rates through May 31, 2016
- Continuing to provide economic development and assistance to low-income customers for the two-year extension period at the levels established in the most recent ESP
- Providing Percentage of Income Payment Plan (PIP) customers with a 6 percent discount off their electricity rate
- Continuing to provide capacity to both shopping and non-shopping customers at a market-based price set through an auction process
FirstEnergy is a diversified energy company dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies comprise one of the nation's largest investor-owned electric systems. 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 approximately 23,000 megawatts.
Forward-Looking Statement: 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 before FERC and 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 the PJM Interconnection, L.L.C., (PJM) 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, 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 CSAPR which was stayed by the courts on December 30, 2011, and the effects of the EPA's MATS rules, the uncertainty of the timing and amounts of the capital expenditures that may arise in connection with any litigation including 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), the uncertainty associated with the company's plan to retire its older unscrubbed regulated and competitive fossil units, including the impact on vendor commitments and PJM's review of the company's plans, 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, FirstEnergy's ability to improve electric commodity margins and the impact of, among other factors, the increased cost of fuel and fuel 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 NDTs, pension trusts and other trust funds, and cause FirstEnergy and its subsidiaries to make additional contributions sooner, or in amounts that are larger than currently anticipated, the impact of changes to material accounting policies, 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 major industrial and commercial customers of FirstEnergy and its subsidiaries, issues concerning the soundness of financial institutions and counterparties with which FirstEnergy and its subsidiaries do business, issues arising from the completed merger of FirstEnergy and Allegheny Energy and the ongoing coordination of their combined operations including FirstEnergy's ability to maintain relationships with customers, employees and suppliers, as well as the ability to continue to successfully integrate the businesses and realize cost savings and other synergies, 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, except as required by law, any forward-looking statements contained herein as a result of new information, future events or otherwise.
SOURCE FirstEnergy Corp.