FirstEnergy seeks rate increases for Pa. electric customers
Customers of FirstEnergy Corp.'s Pennsylvania electric utilities can expect to see higher monthly bills next year and more rate requests.
The Akron, Ohio-based company said it will file requests Thursday with the state Public Utility Commission seeking rate increases that would generate as much as $439 million in additional revenue at its four utilities: West Penn Power, Penn Power, Met-Ed and Penelec.
The company's proposed increases would boost the average West Penn Power residential customer's bill by 9.6 percent, or $10.89, and the average Penn Power residential bill by 14.2 percent, or $18.45, starting in January. Combined, the two utilities serve about 880,000 customers in Western Pennsylvania.
The requests come a year after the PUC approved increases of 13.1 percent for West Penn Power customers and 7.4 percent for Penn Power. They also come two days after the company reported a profit of $328 million during the first three months of 2016, up from $222 million during the same period last year.
The increases would offset the cost of infrastructure improvements, energy efficiency programs, decreased sales and increased technology for workers, FirstEnergy officials told analysts on a conference call Wednesday discussing quarterly financial results. The company said the extra money also would go to technologies that reduce or shorten outages, more tree-trimming to protect lines and poles, and updating handheld equipment used by workers in the field.
“This will bring the average residential bill (for FirstEnergy customers) up to what's average in the state,” said Chief Financial Officer James Pearson. “You will recall we went a number of years without increasing rates in Pennsylvania.”
State Consumer Advocate Tanya McCloskey said she expects the requests to generate a lot of scrutiny, given how recently the utilities received increases and that they have a pending request for an additional surcharge.
“For West Penn, Penn Power and Penelec, their rates have been lower than average,” McCloskey said. “But we don't compare to the average — it's about the territory.”
McCloskey said she had not seen details of the requests and that her office would follow normal procedures in filing any objections with the PUC.
For its other Pennsylvania utilities, the company wants increases that would boost a Met-Ed residential bill by 13.6 percent and a Penelec home bill by 17.1 percent. FirstEnergy also is seeking an increase for its JCP&L utility in New Jersey.
The commission last April approved the first rate increases for the utilities in more than 20 years, though it did not give FirstEnergy all the money it sought. Those increases put the average monthly residential bill for Penn Power at $112.56 and for West Penn at $104.62.
In February, FirstEnergy asked the PUC to approve a separate surcharge increase of about 6 cents a month for customers to cover $245 million it plans to spend on system improvements over the next five years. A decision on that request is pending.
CEO Charles Jones said these would not be the last requests as the company positions itself for growth.
“You're going to see more and more rate increases in order to accommodate that growth,” he said.
In addition to utilities in five states, FirstEnergy operates power plants, including the Bruce Mansfield coal plant and Beaver Valley nuclear plant in Shippingport and a gas-fired plant in Springdale.
Low demand from the grid and low wholesale prices for electricity, especially during the recent mild winter, prompted the company to stop generating at Bruce Mansfield for several weeks.
David Conti is the assistant business editor at the Tribune-Review. Reach him at 412-388-5802 or dconti@tribweb.com.
