Update: As previously reported, the PUCO disallowed $43,362,796.50 of FirstEnergy’s recovery which correlated to FirstEnergy’s renewable energy credits (“RECs”) purchased in 2011, and directed FirstEnergy to credit Rider AER in that amount within 60 days of the issuance of a final appealable order in this proceeding.
On August 30, 2013, Interstate Gas Supply (“IGS”) filed an application for rehearing arguing that the PUCO order is unlawful because the refund will decrease the price to compare in such a fashion as to negatively impact the competitive market; and, only current non-shopping customers will receive the ordered refund, even though there are other FirstEnergy customers who paid the costs associated with the 2011 vintage RECs. In the alternative, IGS requests the PUCO to require FirstEnergy to identify which customers paid Rider AER at the time of the error and order FirstEnergy to refund those customers, regardless of who currently provides the electric service. In response, memorandums contra IGS’ application for rehearing were filed by FirstEnergy, OCC, OEG and Nucor Marion Steel.
Additionally, applications for rehearing were filed by FirstEnergy and, OCC, The Sierra Club, Ohio Environmental Council, and the Environmental Law and Policy Center (collectively “Environmental Intervenors”) on September 6, 2013. Direct Energy Services and AEP-Ohio filed motions for leave to file an application for rehearing along with an application for rehearing.
In its application for rehearing, FirstEnergy argues that the order was unjust and unreasonable because the PUCO found that: (1) FirstEnergy did not meet its burden of proof that the purchases of 2011 vintage In-State All Renewables in 2010 were prudent; (2) FirstEnergy refund monies collected under duly authorized rates and thus the Order mandates impermissible retroactive ratemaking; (3) all but 5,000 of the 2011 In-State All Renewables purchased in RFP3 should be disallowed; (4) the “three percent test” in R.C. 4928.64(C)(3) was mandatory; and (5) FirstEnergy must refund the disallowance prior to the conclusion of any appeals to the Ohio Supreme Court.
OCC’s application for rehearing sets forth ten assignments of error, most of which allege the PUCO erred by requiring FirstEnergy’s customers to pay for certain renewable energy credits. The Environmental Intervenors argue, among other things, that the PUCO erred when it failed to initiate a corporate separation investigation.
Direct Energy alleges that refunding the money through the AER Rider is unreasonable because it deprives customers who are now shopping their share of any renewable energy compliance cost over-recovery, and it distorts the price to compare. Finally AEP-Ohio argues that the PUCO erred by not granting its motion to intervene, not reopening the record to consider additional evidence presented by AEP-Ohio, and that the prohibition against retroactive ratemaking only applies in traditional base rate proceedings.
The PUCO has thirty days to issue an entry on rehearing. The PUCO’s entry on rehearing will likely provide clarity as to how FirstEnergy’s should allocate customer refunds. We will continue to monitor this case and will provide updates.
