Four Public Utilities Commission of Ohio (PUCO) investigations are currently ongoing in response to the criminal investigation brought by the U.S. Department of Justice surrounding the passage of Amended Substitute House Bill 6 during the 133rd General Assembly.
What utilities do the PUCO regulate?
The PUCO regulates three distribution utilities owned by FirstEnergy Corporation: The Cleveland Electric Illuminating Company, Ohio Edison Company, and The Toledo Edison Company. Rates charged by electric distribution companies are overseen by the PUCO.
Who are these other entities?
FirstEnergy Corporation is a holding company that owns many utilities and other subsidiaries across several states and is not regulated by the PUCO.
Energy Harbor (formerly known as FirstEnergy Solutions) is a PUCO-certified competitive retail energy supplier, which emerged from chapter 11 bankruptcy in February 2020. Following the bankruptcy, Energy Harbor is no longer affiliated with FirstEnergy Corporation.
Suvon LLC d/b/a FirstEnergy Advisors is a PUCO-certified competitive retail energy broker and aggregator owned by FirstEnergy Corporation.*
* on Nov. 3, 2021, the PUCO issued an order to cancel its certifying of FirstEnergy Advisors, meaning the company is no longer permitted to act as a retail energy broker and aggregator in Ohio.
Open proceedings or investigations
The PUCO is aware many other investigations, inquiries, or litigation currently underway by or before various federal or state government or regulatory agencies regarding matters outside the jurisdiction of the PUCO.
The Commission has stated “[while we are] aware of reports containing allegations against FirstEnergy Corp. regarding its conduct in the passage of HB 6 and the subsequent referendum, we are determined to act in a deliberate manner, based upon facts rather than speculation, and with due consideration to the limits on our statutory authority over FirstEnergy Corp. and over the political and charitable activity of all public utilities in this state.”
The Commission has also stated "These investigations complement, but do not seek to supplant, the ongoing criminal investigation by the United States Attorney and the civil action by Ohio Attorney General Dave Yost pursuant to Ohio’s civil RICO statute. However, it is of utmost importance that our investigations do not interfere with the criminal investigation by the United States Attorney or the action brought by the Ohio Attorney General."
In addition to the proceedings outlined below, on Dec. 30, 2020, the Commission issued an entry in case 19-361-EL-RDR reinstating a requirement for The Cleveland Electric Illuminating Company, Ohio Edison Company, and The Toledo Edison Company to file an application for a base distribution rate case by May 31, 2024.
Below is a high-level summary of each of the four proceedings along with important upcoming dates. This page will be updated regularly as the cases progress. The following does not substitute or supersede Commission or attorney examiner entries and orders.
Political and Charitable Spending Review
Case 20-1502-EL-UNC. On Sep. 15, 2020, the Commission opened a proceeding to review whether the political and charitable spending by Cleveland Electric Illuminating Company, Ohio Edison, and Toledo Edison in support of Am. Sub. HB 6 and subsequent referendum effort was included, directly or indirectly, in any rates or charges paid by customers.
- The utilities filed an affidavit responding to the Commission entry on Sept. 30, 2020, and filed a supplemental response on Aug. 6, 2021.
- A July 29, 2021 PUCO attorney examiner entry granted a joint motion by parties to indefinitely suspend a previously set comment period.
- A Oct. 28, 2021 PUCO attorney examine entry established comment and reply comment deadlines of Nov. 29, 2021 and Dec. 14, 2021.
- On March 9, 2022, the Commission issued an entry and request for proposal for audit services.
Corporate Separation Audit
Case 17-974-EL-UNC. On Nov. 4, 2020, the Commission initiated an audit of FirstEnergy Corp.’s compliance with Ohio’s corporate separation laws and rules, which are designed to ensure that no undue preference or competitive advantage is provided to an affiliate by an electric distribution utility. The audit is to include an examination of the time period leading up to the passage of HB 6 and the subsequent referendum. The Commission stated that it believes the information supplied by FirstEnergy Corp. in the Form 8-K filed with the U.S. Securities and Exchange Commission requires that the Commission take additional action to ensure compliance by the FirstEnergy utilities and their affiliates with the corporate separation provisions of R.C. 4928.17 and with Commission-approved corporate separation plans.
- A third-party audit report was filed on Sept. 13, 2021.
- A Nov. 12, 2021 PUCO attorney examiner entry extended a previously scheduled comment and reply comment deadline of November 22 and December 13.
- An evidentiary hearing will take place beginning August 22, 2022 at the PUCO offices in Columbus.
Distribution Modernization Rider Audit
Case 17-2474-EL-RDR. On Dec. 30, 2020, the Commission granted an Ohio Consumers’ Counsel (OCC) motion to reopen the proceeding and initiate a review of FirstEnergy's Distribution Modernization Rider.
- The PUCO issued a request for proposal seeking a third party auditor.
- A June 2, 2021 Commission entry selected a third party auditor.
- An audit report was filed on Jan. 14, 2022.
- A Feb. 18, 2022 attorney examiner entry established a comment period regarding the Jan. 14, 2022 audit report. Initial comments are due April 19, 2022, and reply comments are due May 4, 2022.
Delivery Capital Recovery Rider
Case 20-1629-EL-RDR. On March 10, 2021 the Commission issued an entry to expand the scope of an ongoing third-party audit of FirstEnergy's Delivery Capital Recovery Rider. The DCRR recovers the utilities' annual expenses related to distribution infrastructure investments.
The audit is expanded to examine “certain transactions … that were either improperly classified, misallocated … or lacked supporting documentation” the utility stated in a recent SEC filing that may or may not have been included in rates charged to customers .
- The 2020 audit of the delivery capital recover rider was filed on Aug. 3, 2021.
- Comments and reply comments regarding the August 3 audit report are due to be filed by October 4 and October 14.
- A audit report of utility stadium naming rights was filed on Nov. 19, 2021.
- A Dec. 15, 2021 Commission entry expanded the scope of this audit to investigate an apparent nondisclosure of "side agreements" in the utilities' electric security plan proceedings. The Commission's entry stayed this portion of the proceeding during the pendency of other criminal and civil litigation.