FirstEnergy Seeks To Consolidate Pennsylvania Distribution Companies Into Single Utility; Includes Changes To Supplier Tariff -- EnergyChoiceMatters.com

FirstEnergy Seeks To Consolidate Pennsylvania Distribution Companies Into Single Utility; Includes Changes To Supplier Tariff

March 7, 2023

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Metropolitan Edison Company ('Met-Ed'), Pennsylvania Electric Company ('Penelec'), Pennsylvania Power Company ('Penn Power'), West Penn Power Company ('West Penn'), and various other FirstEnergy entities have filed an application before the Pennsylvania PUC for various transactions which would merge Met-Ed, Penelec, Penn Power, and West Penn Power into a single distribution utility and default service provider, named FirstEnergy Pennsylvania Electric Company ('FE PA')

FE PA would provide only distribution service and act as a default service provider. As a result of related proposed transactions, FE PA would not own or operate any transmission assets. Specifically, the transmission assets of West Penn Power would be separated and not included in FE PA (Met-Ed, Penelec, and Penn Power previously separated their transmission assets into separate FirstEnergy companies)

FE PA proposes to adopt Met-Ed, Penelec, Penn Power, and West Penn’s existing retail customer tariffs and would institute "Rate Districts" corresponding to the existing service areas; namely, the Met-Ed Rate District, Penelec Rate District, Penn Power Rate District, West Penn Rate District, and The Pennsylvania State University (PSU) Rate District (PSU currently has certain unique rates within the West Penn tariff)

The applicants said, "FE PA will seamlessly provide electric distribution service and supplier coordination services to existing and new customers and electric generation suppliers within the former service territories of Met-Ed, Penelec, Penn Power, and West Penn."

The proposed merger will continue the current rate structure of Met-Ed, Penelec, Penn Power, and West Penn until a future base rate case filing, the applicants said

FE PA said that it will, pending the Commission’s approval of further consolidation in future proceedings, maintain as appropriate the current default service portfolios and rates for each rate district

The Joint Applicants propose to consolidate the electric generation supplier coordination tariffs into one combined electric generation supplier coordination tariff.

While the consolidated EGS supplier coordination tariff largely mirrors the existing supplier tariffs at each EDC, the applicants do propose certain omissions in such consolidation.

Notably, the following provisions in the West Penn supplier tariff are proposed to be eliminated and not included in the consolidated EGS supplier coordination tariff:

"8.3 The Company's Role. The Company shall allocate hourly energy, daily capacity, and transmission load obligations in accordance with the currently effective PJM and FERC rules, regulations, practices and procedures. The Company will submit these values electronically to PJM, following the PJM guidelines as may be changed from time to time. The Company shall provide supporting data for all calculations. Where possible, the Company will reasonably assist Registered EGS’s on an as needed basis to validate PJM settlement data reported for a particular Registered EGS. Such assistance may be subject to the Technical Support and Assistance Charge in the Electricity Supplier Fees Rider."
"15.4 Company's Indemnification of Registered EGS. Subject to Rule 15.2, in the event the Company is not able to render continuous, regular, and uninterrupted supply of service due to interruption or service limitations not caused by the Registered EGS, the Company shall hold the Registered EGS harmless for any penalties, fines, or other costs that the Company may incur."
"3.11 Previously Registered EGS. Any currently Registered EGS will not be required to submit a new Registration Package or modify a previously approved Registration Package. EGS’s subject to the conditions provided in Rule 17.1 must reapply to the Company for Registration."

Notably, while the proposed consolidated supplier tariff has various provisions concerning metering and calculation of load pulled from the other EDCs' tariffs, it omits the unique West Penn provision that, "the Company will reasonably assist Registered EGS’s on an as needed basis to validate PJM settlement data reported for a particular Registered EGS."

The applicants said that, "The Transaction will have no effect on electric competition for customers of the Pennsylvania OpCos, nor will it have any impact on electric generation suppliers."

If the Commission grants the approvals requested in this Joint Application, FE PA will become a 'public utility' as defined in Section 102 of the Public Utility Code, 66 Pa.C.S. § 102, and an 'electric distribution company' and 'default service provider' as defined in Section 2803 of the Public Utility Code, 66 Pa.C.S. § 2803, and its service territory will correspond with the current service territories of the Pennsylvania OpCos.

The applicants said that, "The branding of the individual Companies will not change in the near-term."

Docket A-2023-3038771 et al.

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