FirstEnergy Ohio Utilities Announce Powering Ohio's Progress, a Long-Term Electric Rate Stability Plan Economic Stability Program will mitigate long-term price volatility, reliability challenges
FirstEnergy Corp.'s (NYSE: FE) Ohio utilities filed a proposed Electric Security Plan (ESP) called Powering Ohio's Progress with the Public Utilities Commission of Ohio (PUCO). The proposed plan will freeze distribution rates in place while helping keep critical baseload power plants available to serve Ohio customers.
Powering Ohio's Progress proposes to establish electric service for a three-year period from June 1, 2016, through May 31, 2019, for customers of FirstEnergy's Ohio's utilities - Ohio Edison, Cleveland Electric Illuminating and Toledo Edison. A key component of the plan is a 15-year Economic Stability Program that will help mitigate rising retail prices and help ensure that vital baseload power plants built to serve Ohio customers remain available to support the state's electric consumers and businesses.
The Economic Stability Program, as proposed, will reflect a purchased power agreement involving the Davis-Besse Nuclear Power Station in Oak Harbor, Ohio; W.H. Sammis Plant in Stratton, Ohio; and Ohio Valley Electric Corporation (OVEC) units in Gallipolis, Ohio, and Madison, Indiana. FirstEnergy's Ohio utilities will purchase the output of these facilities and sell it into the wholesale energy and capacity markets. As power prices increase as projected over time, proceeds from the market sales that exceed costs from the purchased power agreement will be applied as credits on customers' electric bills to mitigate volatility and address rising retail prices.
While the typical residential customer using about 750 kilowatt-hours of electricity per month could expect to see a modest increase in the initial years, the Economic Stability Program is projected to save customers approximately $2 billion over 15 years.
"Reliable, affordable electricity is critical to Ohio's economic vitality and security," said FirstEnergy President and Chief Executive Officer Anthony J. Alexander. "Our utilities have made great strides enhancing service reliability across our system of poles and wires, but Ohio's economic security and quality of life is highly dependent on maintaining a diverse mix of baseload coal and nuclear power plants. Powering Ohio's Progress helps ensure these vital facilities continue powering the state's energy-intensive economy, helps protect customers against volatility as future prices rise, and preserves $1 billion in annual statewide economic benefits, vital tax revenues for local communities, and an estimated 3,000 direct and indirect jobs created by these plants."
FirstEnergy's current ESP is widely considered a success in terms of its ability to produce competitively priced electricity for customers who remain with the utility for all facets of electric service, as well as giving customers the ability to freely shop for a competitive retail electric supplier. Overall distribution rates for an average residential electric customer have only increased by 40 cents, or about one percent, since FirstEnergy's first ESP took effect in 2009.
Under Powering Ohio's Progress, many of the customer benefits in the utilities' current ESP will continue, including:
- Freezing the current base distribution rates through May 31, 2019.
- Continuing to provide generation supply to non-shopping customers through a competitive bid process.-- Retaining customers' option to shop for a competitive retail electricsupplier.
- Providing up to $6 million per year in economic development funding for Ohio communities and energy efficiency assistance to low-income customers during the three-year term of the plan.
- Supporting continued investment in distribution system reliability.
FirstEnergy is a diversified energy company dedicated to safety, reliability and operational excellence. Its 10 electric distribution companies form one of the nation's largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. Follow FirstEnergy on Twitter @FirstEnergyCorp.
Click here to read the full press release along with Forward-Looking Statements.
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