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.
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.”
In addition to the proceedings outlined below, on Dec. 30, 2020, the Commission issued an entry 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
- An April 22, 2021 PUCO attorney examiner entry directed intervening parties to file comments regarding the utilities' affidavit by May 21, 2021, and reply comments by June 4, 2021.
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 will be filed in the case docket by June 21, 2021.
- The PUCO’s attorney examiner may issue additional procedural schedule upon the filing of the audit report to allow intervening parties to weigh in on the report’s findings.
- A prehearing conference will take place on April 29, 2021 regarding pending motions to compel discovery.
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. Responses to the RFP are due May 18. After evaluating proposals, the Commission will issue an entry to select a third party auditor.
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 Recover 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 .
- A May 3, 2021 PUCO attorney examiner entry directed the audit report to be filed by July 6, 2021.