Energy Central News

Curated power industry news from thousands of top sources.


FirstEnergy customers getting one-time ‘decoupling' refunds

  • Jul 15, 2021 8:47 am GMT
Sun Press

COLUMBUS - FirstEnergy electricity customers will see a one-time refund on their August bills, thanks to the end of a so-called "decoupling" charge brought about by a partial repeal of the scandal-tainted House Bill 6.

On July 7, the Public Utilities Commission of Ohio approved FirstEnergy's plan to refund ratepayers more than $27 million in total for money collected for 13 months starting in January 2020 - as well as interest.

Exactly how much FirstEnergy customers will be refunded will vary, depending on which subsidiary they use. Their refunds will be based not on how much they paid in past decoupling charges, but how much power they use in August 2021, according to PUCO spokesman Matt Schilling.

A residential customer who uses 1,000 kilowatt-hours of electricity next month would get a refund of $8.95 if they're an Ohio Edison customer, $13.19 if they use Toledo Edison, and $16.18 if their power company is Cleveland Electric Illuminating Company, according to a PUCO news release.

Commercial and industrial customers will also get refunds, though what each of those users should expect to get is harder to calculate and will vary more, as they pay not only a kilowatt-hour charge but a demand charge as well, Schilling said.

The decoupling provision of HB6 guaranteed FirstEnergy a minimum revenue level of $978 million, the amount FirstEnergy collected in 2018, an unusually high-demand year. The policy thus allowed the Akron-based utility to collect that same, comparative high amount of money from customers even in years when demand was down.

By tying revenue to such a lucrative year, decoupling "essentially takes about one-third of our company and I think makes it somewhat recession-proof," Chuck Jones, then FirstEnergy's CEO, said during a call with investors in 2019.

In 2021, decoupling would have allowed FirstEnergy to collect an estimated $102 million more from ratepayers, according to Attorney General Dave Yost's office.

Earlier this year, FirstEnergy reached a deal with Yost to stop the decoupling policy going forward in exchange for the AG's office dropping a legal challenge to it.

But that deal didn't affect the $26 million FirstEnergy had already collected from customers since January 2020. Rather, refunds were ordered as part of House Bill 128, a partial repeal of HB6 signed by Gov. Mike DeWine in early April.

Even though the refund was ordered by HB128, the PUCO had to formally sign off on the measure in order for it to take effect.

Other Ohio utilities have decoupling programs that were set up prior to HB6's passage. They were designed to encourage utilities to create energy-efficiency programs by ensuring they wouldn't lose money if such programs resulted in the utilities selling less electricity (in other words, "decoupling" the amount of money a utility makes from how much electricity it sells).

But the decoupling process set up under HB6 was different, as it set a guaranteed revenue based on a specific (and unusually lucrative) year.

PUCO Commissioner Dan Conway, a Republican, said prior to the July 7 vote that he thinks the FirstEnergy decoupling refunds are a "good thing," as "Its flaws (and) shortcomings have been argued - and some would say convincingly made – over the past year or so."

Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.

No discussions yet. Start a discussion below.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »