PJM Forced to RMR FirstEnergy Units, FirstEnergy Reports Higher Competitive Retail Sales

Increased competitive retail sales directly to large and mass market customers by FirstEnergy Solutions, net of the impact from changed pricing versus the year-ago, led to a $117 million improvement in commodity margin during the first quarter of 2012, FirstEnergy said in reporting earnings.

In the first quarter of 2012, FirstEnergy Solutions' direct retail sales to large and medium customers increased 2.7 million MWh, or 28%, versus the year ago. Mass market retail sales increased by 1 million MWh, a six-fold increase.

A "significant portion" of the growth in FirstEnergy Solutions' direct sales to large and mass market customers took place outside of the traditional FirstEnergy footprint, in markets including Central and Southern Ohio, Pennsylvania, Illinois, Michigan and New Jersey.

Governmental aggregation sales for the quarter declined by 150,000 MWh, due to weather. FirstEnergy Solutions said that it was awarded contracts to supply governmental aggregations by 42 of the 50 Ohio communities which had aggregation measures on the November ballot, and began serving customers under several of those agreements in the first quarter.

A breakdown of growth in direct retail sales by market and customer segment for the first quarter, as well as comparisons of POLR and aggregation sales, is available here.

FirstEnergy's quarterly report includes an aggregate switching percent for the first quarter for each of its distribution companies, listed on page 11 of its report to investors. Although the data reflects an average for the quarter (rather than end of quarter statistics), and is not broken out by customer class, the data is of some utility given that the most recent Ohio migration data from PUCO is as of the fourth quarter.

FirstEnergy also reported that PJM's current planning assumption requires reliability must run agreements for Eastlake units 1 through 3, Lake Shore unit 18 and Ashtabula unit 5, representing 885 MW which FirstEnergy had intended to retire. FirstEnergy anticipates that the RMR arrangements will be structured so that PJM will compensate the company to keep the units available for operation through early 2015.

The remaining competitive units that FirstEnergy had previously announced would retire -- Eastlake units 4 and 5, Bay Shore units 2 through 4, Armstrong and R. Paul Smith -- are expected to be retired as planned by September 1 of this year.