Update: In March 2014, the Public Utilities Commission of Ohio (Commission) became aware that competitive retail electric service (CRES) suppliers have included pass-through clauses in the terms and conditions of a number of their fixed-rate contracts. Such clauses purportedly allow the CRES supplier to pass through to customers the additional costs associated with certain events.
On April 9, 2014, the Commission opened an investigation to determine whether it is unfair, misleading, deceptive, or unconscionable to market supply contracts as fixed-rate contracts when the contracts include pass-through clauses. To date, the Ohio Consumers’ Counsel and the Ohio Energy Group have intervened in the investigation. OMA likewise intends to intervene in the matter.
Along the same lines as the themes at issue in the Commission’s investigation, a number of OMA members have recently been notified by FirstEnergy Solutions (FES) that FES intends to pass through to customers’ charges for the company’s additional costs of providing power during extreme cold in January. FES is attempting to pass these charges through to customers despite the fact that such members have fixed-rate contracts with FES.
Based upon the Commission’s investigation of retail practices such as those FES is utilizing, and FES’ notification of a number of OMA members that it intends to pass charges beyond fixed contract prices on to customers in the upcoming months, OMA will be submitting comments relating to these types of practices in the Commission’s investigation on or before May 9, 2014. Additionally, a number of OMA members have directly disputed FES’ ability to pass these types of charges through to customers. These members are presently considering filing a formal complaint against FES at the Commission.
On April 25, 2014, FirstEnergy Solutions announced that it will not bill residential customers for pass-through charges associated with providing power during the polar vortex. The company determined last week that it would forego the collection of the one-time fee for residential ratepayers, estimated at between $5 and $15. Despite this decision, FirstEnergy Solutions is still planning to bill its commercial and industrial customers for the alleged pass-through event. As mentioned above, OMA and its members will be opposing the assessment of pass-through charges in comments filed in the Commission investigation, and potentially through a direct challenge to FES’ practices, filed with the Commission.
The Retail Energy Supply Association, which represents a number of CRES suppliers in Ohio, has indicated that it intends file comments in the Commission investigation that will underscore the importance of disclosure of key terms and conditions in supplier contracts, as well as the importance that such disclosure occurs in a manner understandable by consumers.
