Archive

Daily Email

Events

 

 

 

About/Contact

Search

Updated:
PUC Of Ohio Says FirstEnergy Branding, Corporate Separation Issues Should Be Addressed In Other Proceedings, In Granting Broker License To FirstEnergy Advisors

Earlier:
PUC Of Ohio Grants Broker/Aggregator License To FirstEnergy Advisors


April 22, 2020

Email This Story
Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

Update, 4:55 p.m.

The Public Utilities Commission of Ohio has issued a written order granting an electric broker and aggregator license to Suvon, LLC, d/b/a FirstEnergy Advisors and FirstEnergy Home, to serve all customer classes in all service areas.

EnergyChoiceMatters.com had first reported the granting of the license earlier today (original story below)

In the written order, PUCO said that issues raised by opponents of granting the license, such as those related to branding and corporate separation (noted in our original story below), should be addressed in existing cases related to such matters, not the licensing docket

In the written order, PUCO said, "The Commission notes that the arguments of intervenors center around questions regarding the fact that Suvon will be doing business under a trade name derived from the name of its corporate parent, FirstEnergy Corp., and whether Suvon is properly separated from the FirstEnergy Utilities. We note that these are not new or novel questions. FirstEnergy Corp. has previously had a competitive affiliate certified as a CRES provider in this state. In re FirstEnergy Solutions Corp., Case No. 00-1742-EL-CRS, Entry (Nov. 2, 2000). Likewise, we have certified other CRES providers who are or were affiliated with a public utility in this state. In re AEP Energy, Inc., Case No. 10-384-EL-CRS; In re IGS Dayton, Inc., f/k/a DP&L Energy Resources, Inc., Case No. 00-2171-EL-CRS. Further, certified competitive retail natural gas suppliers, who were unaffiliated with any public utility, have reached contractual agreements to use a trade name similar to the name of a public utility. Ohio Consumers’ Counsel v. Interstate Gas Supply d/b/a Columbia Retail Energy, Case No. 10-2395- GA-CSS, Opinion and Order (Aug. 15, 2012)."

"We note that the existing requirements for proper disclosure of the affiliate relationship has been considered to be a necessary and sufficient protection in all prior cases. We expect Suvon to include and present the required disclosure, in a conspicuous and efficacious manner in all communications with consumers," PUCO said

PUCO further said, "Nonetheless, the Commission finds that issues regarding Suvon’s use of the trade name and compliance with corporate separation requirements by FirstEnergy Corp. affiliates are best raised in other proceedings, specifically the ongoing review of the corporate separation audit of the three FirstEnergy Utilities in the Corporate Separation Audit Case. OCC and NOPEC have cited the auditor’s report filed in that proceeding, but the Commission has not adopted that report at this time, and the finding and conclusions of the auditor should be litigated in that proceeding rather than this case. We also note that, in itsresponse [sic] to Suvon’s April 1, 2020 supplemental filing, Vistra questions the sufficiency of the FirstEnergy Utilities’ corporate separation plan and cost allocation manual; however, the review of the corporate separation plan and the cost allocation manual are, in fact, essential elements of the corporate separation audit report, and should be addressed in that proceeding. Corporate Separation Audit Case, Audit Report (May 14, 2019) at 19-37, 101-121."

"Therefore, the Commission finds that, pursuant to R.C. 4928.17, the only relevant issues in this certification proceeding are whether Suvon has the managerial, technical and financial capability to be a CRES broker/aggregator in this state. Staff has thoroughly reviewed Suvon’s managerial, technical and financial capability and has recommended that Suvon’s application should be approved. Upon review of the many motions and memoranda filed in this case, we find that no other parties have raised material issues regarding Suvon’s managerial, technical and financial capability. NOPEC’s response to the April 7, 2020 Staff review and recommendation, faulting Staff for failing to address the 'key corporate separation issues in this case,' aptly demonstrates that NOPEC’s sole focus is upon compliance with the corporate separation requirements rather than Suvon’s managerial, technical and financial capability. Moreover, we specifically reject arguments which seek to cast questions regarding compliance with the corporate separation statute and rules as evidence of a lack of managerial, technical and financial capability. Finally, we are not persuaded by OCC and NOPEC’s assertion that use of shared service employees is per se unlawful; OCC and NOPEC have failed to identify any statute, Supreme Court precedent, or Commission ruling in support of this overly broad claim. To the contrary, shared service arrangements are authorized by Federal law," PUCO said

"Upon review of all of the filings in this case, we find that no party has raised any issues which materially dispute Staff’s determination that Suvon has demonstrated the managerial, technical and financial capability to function as a CRES power broker and aggregator in this state. Accordingly, we find that Suvon’s application should be approved. We further find that no hearing is necessary in this proceeding," PUCO said

Regarding the intervention of other retail suppliers and brokers in the license application of FirstEnergy Advisors, PUCO said: "the Commission notes that several of the motions to intervene were filed by Suvon’s competitors. Competition should be determined ultimately by acumen in the marketplace, not by presumptive inhibition through a Commission certification proceeding. Although we have granted intervention in this case to Suvon’s competitors, we will carefully monitor the practice of competitors intervening in certification proceedings to ensure that this does not become a widespread, abusive practice and that competition is not unduly stifled by unnecessary litigation."

Case No. 20-103-EL-AGG


Earlier:

The Public Utilities Commission of Ohio at its meeting today voted to approve an order granting an electric broker and aggregator license to Suvon, LLC, d/b/a FirstEnergy Advisors and FirstEnergy Home, to serve all customer classes in all service areas.

A written order was not yet issued. Commissioners voted to approve the license without substantive discussion

FirstEnergy Advisors's application for a broker license had exclusively been first reported by EnergyChoiceMatters.com in January

As previously reported, the application has been opposed by various stakeholders including NOPEC, the OCC, retail suppliers, and brokers, with NOPEC and OCC alleging that the commonality of management and control among FirstEnergy Advisors, and the FirstEnergy Ohio distribution utilities, "is a per se violation of R.C. 4928.17(A), which requires that a competitive retail electric supplier be 'fully separated' from its regulated utilities" (story here). Retail suppliers have also objected to FirstEnergy Advisors' use of the FirstEnergy brand name

FirstEnergy Advisors has said that its structure and name comply with applicable corporate separation rules and statutes (see story here)

In an updated application, FirstEnergy Advisors said that:

"The Company will also ensure that shared representatives and/or employees are clearly disclosing who they are representing. Annually, every employee is required to review FirstEnergy business practices and certify their awareness and understanding of the Ohio Corporate Separation Rules and commit to adherence to them. A provision of this certification is the requirement for all shared representatives and employees to clearly disclose on whose behalf they are making representations. Corporate Separation Plan, p. 9 ('Shared representatives or shared employees of the Companies and affiliated electric services company will clearly disclose upon whose behalf their public representations are being made when such representations concern the entity's provision of electric services.') Employees also annually take FERC classification training further reinforcing the need to clearly disclose whom they are representing. Participation in annual training is strictly monitored and employees are required to be compliant. Non-compliance with training requirements may result in an adverse employment action, including termination of employment. In addition, in Company marketing and advertising material, the following disclosure, or one very similar, will be made:

"Suvon, LLC, d/b/a FirstEnergy Advisors, is an unregulated subsidiary of FirstEnergy Corp. Suvon, LLC d/b/a FirstEnergy Advisors, is not the same company as FirstEnergy Corp. The prices of Suvon, LLC, d/b/a FirstEnergy Advisors, products and services are not regulated by the state utility commissions. You do not have to purchase any product and/or service from Suvon, LLC, d/b/a FirstEnergy Advisors, in order to receive the same regulated services from FirstEnergy Corp.’s regulated electric utilities – Ohio Edison Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, West Penn Power Company, Pennsylvania Power Company, Metropolitan Edison Company, Jersey Central Power & Light Company, Monongahela Power Company, the Potomac Edison Company, and American Transmission Systems, Incorporated."



NOPEC alleged in comments that, "This 'disclaimer' does nothing to address [an] independent auditor’s concern that use of the FirstEnergy brand gives an affiliated CRES an unfair preference."

NOPEC was referring to a final report from SAGE Management Consultants, LLC (SAGE) on a Compliance Audit of the FirstEnergy Operating Companies (including the Ohio regulated utilities, or Ohio Companies) with the Corporate Separation Rules of the Public Utilities Commission of Ohio (PUCO) in which SAGE, as auditor, recommended that PUCO should, "Remove FirstEnergy from the name of FirstEnergy Solutions to eliminate affiliate bias." FirstEnergy Solutions has since been spun off and is now a separate company, but NOPEC and others said that the issue presented by the auditor applies to FirstEnergy Advisors as well

See our prior story for more details on the auditor's recommendations

NOPEC further alleged that, "In fact, the 'disclaimer' actually is another endorsement to choose FirstEnergy Advisors because it a [sic] trusted member of the FirstEnergy family. The disclaimer touts that: 1. FirstEnergy Advisors is a subsidiary of FirstEnergy Corp; 2. FirstEnergy Corp’s other subsidiaries include each of the FirstEnergy Ohio EDUs; and 3. Customers will continue to receive the same (good, old, familiar) regulated services from the FirstEnergy Ohio EDUs."

As first reported by EnergyChoiceMatters.com (story here), PUCO Staff had recommended approval of the FirstEnergy Advisors application as supplemented

In its original application, FirstEnergy Advisors had stated, "FirstEnergy Advisors' principal business interest is providing energy brokering and aggregation services to business and residential customers."

"Suvon, LLC is currently active under the business trade name Suvon, LLC DBA FirstEnergy Home. Suvon, LLC DBA FirstEnergy Home first became active in December of 2018, and from April 2019 through September 2019 offered home energy repair service programs to customers In New Jersey. In September of 2019, Suvon, LLC DBA FirstEnergy Home expanded its offerings to include home connections for cable and Internet, home repair services and home security systems, and began offering these products and services to customers in Ohio, Pennsylvania, New Jersey, Maryland and West Virginia," the company said in its original application

EnergyChoiceMatters.com previously reported that FirstEnergy Corp. recently released a strategic plan which sets forth a vision to provide customers, "with more than electricity, including new products and services that make their lives easier, brighter and more secure"

"We’re engaged in new business efforts and are well-positioned to offer valuable products and services that help customers save energy and money. Our utility companies enjoy strong name recognition and a long-standing presence in the communities they serve. As a result, customers view us as a trusted source for energy-saving products and services. Industry studies show customers are receptive to buying value-added products and services from their electric utility. These offerings bring comfort, convenience, security and productivity to their lives and businesses," FirstEnergy recently said in the strategic plan (story here)

EnergyChoiceMatters.com also previously reported that FirstEnergy Home's e-commerce venture had expanded to offer internet, voice, video, home security, and smart home products, and other subscription services, in addition to various other home warranty and plumbing plans (see story here)

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
NEW! -- Senior Energy Intelligence Analyst -- Energy Procurement
NEW! -- Channel Partner Sales Manager -- Retail Supplier
NEW! -- Energy Procurement Manager
NEW! -- Channel Relations Manager -- Retail Supplier
Senior Retail Energy Markets Pricing Analyst
Energy Market Analyst -- DFW

Email This Story

HOME

Copyright 2010-20 Energy Choice Matters.  If you wish to share this story, please email or post the website link; unauthorized copying, retransmission, or republication prohibited.

 

Archive

Daily Email

Events

 

 

 

About/Contact

Search