Update: On September 18, 2015, the Commission Staff filed several pieces of direct testimony in the proceeding. Especially pertinent were the testimony of staff witnesses Choueiki and Scheck, who respectively offered testimony on the proposed PPA between FirstEnergy and FirstEnergy Solutions and various other provisions of the stipulation filed in the case. Specifically, staff witness Choueiki’s testimony recommended that the Commission deny Rider RRS as it is currently proposed; however, he indicated that if properly conceived, Rider RRS may be in the public interest. Staff witness Chouieiki further testified that Staff does not believe that FirstEnergy has satisfied the necessary conditions identified by the Commission for approval of a PPA based on the following: (1) the proposed return on equity is excessive and, thus, the requisite demonstration of financial need has not been presented; (2) an independent assessment of the impact of the closures of Davis Besse and Sammis on grid reliability has not been presented; (3) there is no requisite commitment to rigorous Commission oversight of Rider RRS; (4) there is no commitment to full information sharing in proposed Rider RRS; (5) there is commitment to sharing the financial risk associated with Rider RRS with distribution customers; and (6) FirstEnergy did not commit to the severability provision identified by the Commission.

Staff witness Scheck’s testimony stated that Staff believes that any Rider ELR customers receive compensation for providing interruptible service through the current PJM demand response tariffs, rather than being compensated by other distribution customers. Further, Staff witness Scheck testified that Staff does not believe Rider ELR service should be available to customers that are not taking generation service from FirstEnergy. With regard to the commercial high load factor time of use pilot program proposed in the stipulation, Staff witness Scheck testified that Staff believes that any customer in rate classes GS and GP should be eligible for this rate design offering, rather than only those customers who meet the restrictive qualifications set forth in the stipulation. Staff witness Scheck also noted Staff’s lack of support for the payments made to specific signatory parties in the stipulation, stating that to the extent those costs will be recovered from other or all ratepayers and there are no clear or specified benefits returning to all ratepayers, the Staff does not support cost recovery of the amounts through any riders.

Further, the evidentiary hearing on FirstEnergy’s electric security plan (ESP) application and stipulations continued this week, with FirstEnergy witnesses testifying on the economic impact of the plants on their surrounding communities and the state of Ohio, the costs of transmission upgrades that may be needed if the plants at issue are retired, fuel supply diversity, and the mechanics of Rider RRS, which is proposed to collect the costs or return the benefits associated with the proposed PPA. Next week, FirstEnergy witnesses are scheduled to testify on the environmental compliance measures installed at or planned for the plants, as well as whether FirstEnergy’s proposed ESP is more favorable in the aggregate than a market rate offer would be.