Ohio Commissioner Roberto Urges Review of Adequacy of FirstEnergy Corporate Separation

"Adequacy of the [FirstEnergy Ohio utility] Companies' current corporate separation is a legitimate question worthy of Commission consideration," Public Utilities Commission of Ohio Commissioner Cheryl Roberto said in a dissent concerning PUCO's approval of the FirstEnergy Ohio utilities' electric security plan (see related story today)

"The combination of recent discretionary utility decisions by separate generation, transmission, and distribution affiliates within the Companies' corporate family have seemingly produced enhanced investor value without an increase in consumer value but added consumer costs in the nature of significantly higher capacity charges," Roberto said.

"The specific discretionary decisions I reference include the FES [FirstEnergy Solutions] decision to close two generation plants two years earlier than any environmental new requirement was to be imposed resulting in a capacity constraint; FES' continuance nonetheless operating these plants at above-market rates under must-run contracts; ATSI's [American Transmission Systems Inc.] advocacy of its solution to the constraint of approximately $900 million dollars in additional infrastructure to be built at cost plus; the apparent absence of effort by the Companies to use cost-effective means to control the shape and size of its native load; and the proposal in the ESP 3 for un-bid purchase by the Companies from its sister affiliate FES of the PIPP [Percentage of Income Payment Plan] customer load."

"By itemizing these observations, I am not suggesting that the Companies or any other member of the Companies' family has taken an action that is unauthorized or outside of any existing authority in any manner. By highlighting them, however, I am suggesting that the Commission should not be eager to re-approve and extend the Companies' current corporate separation plan [as done under the adopted electric security plan] without a more deliberative review," Roberto said.