FirstEnergy Confirms Review of Potential Regulatory Mechanism to Bring Supply Price Stability to Ohio Utility Customers

FirstEnergy confirmed during an earnings call yesterday that it is considering proposing a mechanism to provide the customers of its Ohio utilities with greater generation price stability, Leila Vespoli, FirstEnergy's Executive Vice President of Markets, said during an earnings call yesterday.

Such a price stability mechanism could be part of FirstEnergy's proposed electric security plan (ESP), which governs default service, for the period beyond June 1, 2016.

While Vespoli said that FirstEnergy expects that, "most of the main aspects of the [next ESP] filing will be similar [to the current design], including the continuation of periodic auctions to procure generation for non-shopping customers," Vespoli did confirm that, "[w]e are also considering, given the substantial changes in market conditions, whether we should propose an option designed to provide our Ohio customers with more generation price stability and [to] reduce exposure to market volatility."

"We're still in the early stages of this, and obviously, a lot of thought and discussion with our Ohio colleagues is still to come. It may prove, however, to be an effective way and perhaps the only way for Ohio regulators to address the volatility in the market and assure stable prices and adequate supplies for Ohio customers," Vespoli said.