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PUCO Approves Electric Security Plan For FirstEnergy's Three Ohio Electric Distribution Utilities

May 23, 2024
Under the plan, effective for five years beginning June 1, 2024, the utilities will continue to source electricity for its customers through a competitive bidding process.

The Public Utilities Commission of Ohio (PUCO) has sanctioned an electric security plan (ESP) for FirstEnergy’s three Ohio electric distribution utilities: Cleveland Electric Illuminating Company, Ohio Edison, and Toledo Edison, effective for five years beginning June 1, 2024.

“The order we approve today strikes an important balance to improve the service quality and reliability of the grid across FirstEnergy’s Ohio service territory and will reduce costs for the utilities’ SSO customers,” said PUCO Chair, Jenifer French. “Competitively priced power, enhancements to reliability and economic development programs, and helping the most vulnerable customers are important components of our order today.”

The utilities will continue to source electricity for its customers through a competitive bidding process during the term of the ESP. The Commission has also approved a provision to remove 3-year bids during the competitive bidding process to minimize price volatility.

During the term of the ESP, FirstEnergy will contribute $32.5 million to fund low-income customer bill assistance programs, bill assistance for income-eligible senior citizens, and develop an electric vehicle (EV) education program to assist customers in transitioning to EVs. The shareholder contribution is not eligible to be included in customer rates.

FirstEnergy will continue providing its Community Connections energy efficiency program to income-eligible customers, an energy efficiency program designed to educate residential customers about the benefits of efficiency and conservation.

The Commission has ordered the utilities to develop a smart thermostat rebate program with up to $2 million in annual funding for future PUCO consideration.

The utilities will be allowed to continue to look for cost recovery for incremental capital investments to its distribution system each year during the term of the ESP.

The Commission has restricted costs eligible to be included by limiting expenses to those booked to FERC Accounts 360-374, noting the change will reduce eligible expenses by approximately $51 million during the first year of the ESP. The amount eligible to be included in rates is capped during the terms of the ESP and subject to future PUCO approval and audit.

While annual caps will increase $15-21 million depending upon the utility’s reliability performance during the first two years of the ESP, they will be determined in the utilities’ pending distribution rate case during the following years of the ESP.

Additionally, the utilities will continue their economic load reduction program designed to incentivize peak demand reduction amongst large energy users. The Commission highlighted the important impact of the program to promote grid reliability and economic development, noting program success during Winter Storm Elliott in 2022.

The Commission ordered the utilities to file an application for a base distribution rate case by May 31, 2028, in addition to the base distribution rate application due to be filed by the end of May 2024. The utilities are ordered to file final tariffs consistent with the current opinion and order.

An application from FirstEnergy’s utilities smart meter deployments is pending before the PUCO.

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