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10 C&I Customers File Suit Against FirstEnergy Solutions Over Polar Vortex Surcharge

September 29, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Ten commercial and industrial customers have filed a lawsuit against FirstEnergy Solutions in the Cuyahoga County, Ohio Court of Common Pleas seeking relief from FES's imposition of the polar vortex pass-through charge on the customers.

The suit's complaint is not novel, and, in brief, the customers argue that their contracts do not allow the pass-through of higher ancillary service costs.

FES has imposed the pass-through by arguing that the costs qualify as a "pass-through event" under the contracts, but the complainants maintain that the pass-through event clause, by its own language, may only be used for, "new or additional," charges from PJM or similar regulatory bodies.

Complainants argued that the charges under FES's RTO expense surcharge are neither new nor additional. "Rather, the charge imposed by PJM on Defendant FES is, on information and belief, the type of charge that has been imposed on Defendant FES by PJM previously," complainants said.

One novel aspect of this specific suit versus some of the complaints filed at the PUC is that complainants are also seeking relief because they aver that, for FES to invoke the pass-through clause, the contracts require FES to, "provide Customer with at least thirty (30) days written notice that a Pass-Through Event has occurred or will occur and the amount of any additional charge related thereto."

"Defendant FES did not specify the amount of the Pass-Through charge. Moreover, each of these letters [notifying the customer of the invocation the pass-through charge] was mailed more than thirty days after the events resulting in PJM imposing increased ancillary charges on Defendant FES," the complainants alleged.

The complainants sought a declaratory judgment that FES may not impose the "RTO Expense Surcharge" as a "Pass-Through Event" pursuant to the terms of their agreements, or otherwise and that these amounts must be removed from their accounts with FES.

The complainants also alleged breach of implied covenant of good faith and fair dealing, and sought an unspecified amount of damages.

Complainants included Lincoln Electric Company, Progressive Casualty Insurance Company, The Greater Cleveland Regional Transit Authority, Marathon Petroleum, Speedway LLC, Delphi Automotive Systems, Sandusky International, Inc., Premix, Inc., HPB Euclid Corp., and IRG RC Lessor LLC

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