FirstEnergy Doesn't Expect "Significant Changes" from Ohio Retail Market Investigation

FirstEnergy does not expect the retail electric market investigation newly launched by the Public Utilities Commission of Ohio to result in "significant changes" to the market rules, the company told investors yesterday in reporting earnings.

"[W]e do not anticipate significant changes to the Ohio market rules," Leila Vespoli, FirstEnergy Corp. Executive Vice President and General Counsel, said.

"[W]e share the Commission's objective to expand retail competition throughout Ohio," Vespoli added.

Among other things, the Ohio investigation is examining the provision of default service, and whether the current structure provides an unfair advantage to the incumbent provider and/or its generation affiliate. The investigation will also consider whether generation and competitive suppliers should be required to completely divest from transmission and distribution entities (Case 12-3151-EL-COI).

FirstEnergy reported that FirstEnergy Solutions won 5 of the 17 tranches available in the January 2013 auction for default service supplies at its Ohio utilities. FirstEnergy Solutions won 24 of 75 available tranches in a February auction for default service supplies at its affiliated Pennsylvania utilities.

FirstEnergy Solutions' focus remains on expanding its retail business and strengthening its brand among customers in both new and existing targeted markets.

Governmental aggregation will remain a priority in 2013, executives said. Last year, FirstEnergy Solutions signed contracts with 160 communities, including more than 100 in Illinois. Today, FirstEnergy Solutions serves this sales channel with more than 17 million megawatt-hours, a 10% increase over 2011, and FirstEnergy Solutions continues to see potential for more growth in both Southern Ohio and Illinois.

FirstEnergy Solutions non-aggregation mass market sales rose 72% in 2012, with much of that growth in Pennsylvania.

A breakdown of FirstEnergy Solutions sales by channel (aggregation, direct, POLR), customer class, and state can be found here, on page 16

Page 15 of the document linked above also includes aggregate shopping data for each FirstEnergy EDC at year-end.

Executives project annual FirstEnergy Solutions sales growth of about 3% to 5% over the next few years.

FirstEnergy Solutions retail growth will drive incremental investment in its existing generation assets, through investment to achieve uprates and increased efficiency and output. Capital will be spent on such projects only after sales have been committed to support them; therefore, the timing of these investments will be linked closely to the growth of the retail business.