FirstEnergy Seeks to be Made ‘Recession Proof’

During an investor call this week, FirstEnergy CEO Chuck Jones announced the distribution utility would file a decoupling application with the PUCO as permitted by the recently enacted House Bill 6. Ohio’s other electric utilities could follow suit later this month.

Decoupling allows a utility to fully recover investments and operating costs at 2018 levels even if sales decline due to customer efficiency improvements. Gongwer News reported that the FirstEnergy CEO touted the decoupling rider for making the monopoly “recession proof.”

According to an OMA analysis of HB 6, the nuclear bailout bill includes provisions that will impose new costs on customers, among them the new decoupling rider. Currently, FirstEnergy recovers part of its distribution costs through its energy efficiency rider, which is going away under HB 6. As a result, FirstEnergy claims it cannot recover its entire distribution costs, and that the decoupling mechanism is necessary to recover costs formerly captured by the terminated energy efficiency charge. Captive customers will be required to pay the utility to make it whole from the loss of energy efficiency profits. Many larger industrial customers have already opted-out of the energy efficiency rider, so the decoupling rider will constitute a new cost to those customers.

Make no mistake, this is another utility profit scheme that comes at customers’ expense. This topic will be discussed at the Nov. 21 OMA Energy Committee meeting. Support ongoing energy advocacy by joining the OMA Energy Group. 11/7/2019