FirstEnergy's electric security plan
Electric Security Plan 101
An electric security plan (ESP) is a rate plan for the supply and pricing of electric generation service. FirstEnergy’s current ESP is in effect through May 2016.
Under the current ESP, generation rates are determined through a competitive bidding process known as an auction. The auction is conducted by an independent bid manager.
FirstEnergy’s base distribution rates are frozen through May 2016.
Aug. 8, 2014, FirstEnergy files ESP application
January 2015, PUCO hosts public hearings throughout FE service territory
August-October 2015, Evidentiary hearing at PUCO offices
Dec. 1, 2015, Stipulation filed by FirstEnergy, PUCO staff, 14 other parties
What did FirstEnergy request in its ESP application?
On Aug. 4, 2014, FirstEnergy filed an application for their next ESP for the period of June 1, 2016 through May 31, 2019. The application also proposes to freeze base distribution rates through the end of the requested ESP period.
In this application, FirstEnergy proposes to secure all supply needed for its standard service offer (SSO) for Ohio Edison, Toledo Edison and The Cleveland Electric Illuminating companies through a competitive bidding process. FirstEnergy proposes to conduct six auctions over a three-year period for products of one to three years in length.
In this application, FirstEnergy requests to add two new riders, modify 12 existing riders and remove six expiring riders.
FirstEnergy has requested approval of a Retail Rate Stability Rider to act as a retail rate stability mechanism through a 15-year power purchase agreement. In the application, the companies seek to acquire generation from their share of Ohio Valley Electric Corporation and generation from the Davis-Besse and W.H. Sammis plants and then sell that capacity back to the PJM market. The proposed rider would include the net costs associated with legacy contracts, capital investments and credit to customers the revenue from selling the capacity, energy and ancillary services from the three plants into the PJM market.
Additionally, the companies request the Government Directives Recovery Rider to recover costs incurred from implementation of programs required by legislative or governmental directives.
- In the application, FirstEnergy commits to provide up to $1 million per year combined for economic development and energy efficiency during the three-year term of the ESP.
- In the application, FirstEnergy commits to provide up to $5 million per year for low-income customers throughout the three-year term of the ESP.
- In the application, FirstEnergy commits to meeting its renewable energy resource requirements during the term of the ESP by obtaining renewable energy credits (RECs) through a request for proposal process.
What agreement did FirstEnergy, PUCO staff and other parties reach?
On Dec. 1, 2015, FirstEnergy, PUCO staff and 15 other parties reached an agreement in the electric security plan case. The agreement, referred to as a stipulation, serves as a recommendation to the five-member Commission, which has the ultimate decision making authority. Commissioners take settlement agreements into consideration, along with all evidence supported in the case record when forming their opinions. The Commission may accept, reject or modify a stipulation.
In the stipulation, the parties recommend extending the term of the ESP to eight years, effective June 1, 2016 through May 31, 2024. FirstEnergy’s standard service offer would continue to be established through a serious of competitively bid auctions.
The stipulation also recommends a term of eight years for the RRS rider—instead of the requested 15 years, includes additional PUCO oversight, and includes a risk-sharing mechanism to credit consumers up to $100 million. Also included are provisions for FirstEnergy to make additional investments in renewable energy, as well as a carbon emissions reduction plan.
Within the stipulation, FirstEnergy makes commitments to expand energy efficiency programs, fund low-income assistance programs and to develop an advanced metering proposal for future Commission consideration.
What happens next?
A hearing will be held at the PUCO offices on Jan. 14, 2016 to allow parties to offer testimony on the stipulation. Signatory parties will file testimony by Dec. 15, 2015. Opposing parties will file testimony by Dec. 30, 2015.
How can I make my voice heard?
In January 2015, the PUCO held three local public hearings to provide the public an opportunity to express their views regarding FirstEnergy’s electric security plan application. Hearings were held in Akron, Toledo and Cleveland.
Consumers may also submit comments online at www.PUCO.ohio.gov or by mail addressed to the Public Utilities Commission of Ohio, 180 E. Broad St., Columbus, OH 43215. Correspondence should include the case number 14-1297-EL-SSO.