FirstEnergy's Electric Security Plan
Senate Bill 221 and Ohio’s electric market
In 2007, the Ohio General Assembly passed Senate Bill 221 to keep electric rates stable, create jobs and expand Ohio’s green energy industry. The new law took effect in 2008 incorporating a system under which rates would be set by the Public Utilities Commission of Ohio (PUCO) beginning Jan. 1, 2009 and outlining a path for electric utilities to implement market-based pricing.
FirstEnergy’s Electric Security Plan
FirstEnergy’s current electric security plan, or ESP, is in effect from June 2011 through May 2014. Under the current ESP, generation rates are determined through a competitive bid process. The competitive bid process is conducted by an independent bid manager each October and January through 2013. FirstEnergy’s base distribution rates will remain frozen through May 2014.
What did FirstEnergy request in its new ESP application
On April 13, 2012, FirstEnergy filed an agreement with a wide range of stakeholders to extend the current ESP through May 2016. The PUCO approved the agreement in July 2012.
Under the terms of the agreement, generation prices will continue to be set by the competitive bidding process, but the bids scheduled to occur in October 2012 and January 2013 will be for a three-year period, rather than a one-year period.
- FirstEnergy will commit $2 million to support economic development and job retention activities within its service territories.
- FirstEnergy will establish a fuel fund of $4 million in each calendar year in 2015 and 2016 that will assist low income customers in paying their bills. FirstEnergy will also provide a fuel fund of $500,000 for Ohio Partners for Affordable Energy each calendar year in 2015 and 2016, also for low income customers.
- FirstEnergy will receive cost recovery for deployment of its smart grid program. All costs associated with the project will be recovered over a 10-year period.
- FirstEnergy will meet its renewable energy resource requirements during the term of the ESP by obtaining renewable energy credits (RECs) through a request for proposal process, with a specific requirement for solar RECs through four 10-year contracts.
- The Delivery Capital Recovery Rider (DCR) will continue to be in place as a mechanism to encourage investment in the delivery system in order to enhance service reliability in lieu of a distribution rate case.
Did the PUCO consider public opnion?
Yes. The PUCO held local public hearings in Akron, Toledo and Cleveland in June 2012.