$6.6 M Should Be Returned To FirstEnergy Customers: Commission

COLUMBUS, OH — FirstEnergy should return $6.6 million to customers, according to an audit released by the Public Utilities Commission of Ohio on Tuesday.

FirstEnergy has been embroiled in a statewide scandal since federal investigators announced they were looking into the passing of House Bill 6, a $1.3 billion nuclear bailout which benefited two FirstEnergy plants. The company recently signed a deferred prosecution agreement and agreed to pay $230 million to the state and federal government and admitted wrongdoing in the case, prosecutors announced.

As investigation into the House Bill 6 scandal continues, the Public Utilities Commission of Ohio has launched four of its own investigations into questions surrounding the legislation and the behavior of FirstEnergy.

The commission regulates three FirstEnergy subsidiaries: the Cleveland Electric Illuminating Company, Ohio Edison Company, and the Toledo Edison Company. On Tuesday, the commission announced it audited the companies' delivery capital recovery rider for 2020. They were specifically examining payments related to 17 vendors and whether customers paid for those charges.

In February 2021, FirstEnergy contacted the Securities and Exchange Commission (SEC) and told them it had identified several possible expenses that may have been improperly classified, misallocated or lacked supporting documentation. The expenses all came from a report submitted to the SEC in February 2021, the audit said.

A day after alerting the SEC to the possible problems with its expense sheet, the Public Utilities Commission of Ohio initiated an audit of the companies' vendor expenses. They found $6.6 million should be returned to customers, the commission said.

Specifically highlighted in the audit are vendor payment expenses, to the tune of $2.4 million, that were charged to customers via base distribution rates, $4.15 million charged to customers through the demand side management and energy efficiency rider, and $82,850 charged to customers for pole attachment rates.

Pole attachment rates are usually paid by other utilities, telecom providers and municipal corporations, the commission said.

"While FirstEnergy is still reviewing the audit report, we are committed to working with the PUCO to address the vendor transactions through customer refunds," a company spokesperson said.

The audit report also identified $7.4 million in expenses that were classified as capital, but should be kept out of future ratemaking by FirstEnergy. The companies must file an application with the Public Utilities Commission of Ohio by May 2024 before setting base distribution rates.

An administrative law judge will establish a procedural schedule in this case to determine the next step. There's no firm timetable on when an official edict may be issued and the audit does not bind FirstEnergy to any specific action, a commission spokesperson told Patch.

In early July, FirstEnergy and the Public Utilities Commission announced that many Ohio customers would see a refund on their electric bills, as money collected via decoupling was returned to residents.