Commission | Registrant; State of Incorporation; | I.R.S. Employer | ||
File Number | Address; and Telephone Number | Identification No. | ||
333-21011 | FIRSTENERGY CORP. | 34-1843785 | ||
(An Ohio Corporation) | ||||
76 South Main Street | ||||
Akron, OH 44308 | ||||
Telephone (800)736-3402 | ||||
(d) | Exhibits |
Exhibit No. | Description | |
99.1 | Press Release issued by FirstEnergy Corp., dated August 4, 2014 (Pennsylvania) | |
99.2 | Press Release issued by FirstEnergy Corp., dated August 4, 2014 (Ohio) | |
99.3 | Letter to the Investment Community, dated August 4, 2014 |
FIRSTENERGY CORP. | |
Registrant | |
By: | /s/ K. Jon Taylor |
K. Jon Taylor Vice President, Controller and Chief Accounting Officer |
Exhibit No. | Description | |
99.1 | Press Release issued by FirstEnergy Corp., dated August 4, 2014 (Pennsylvania) | |
99.2 | Press Release issued by FirstEnergy Corp., dated August 4, 2014 (Ohio) | |
99.3 | Letter to the Investment Community, dated August 4, 2014 |
• | Penn Power has requested an increase of $28.5 million or approximately 8.7 percent over current rates. If approved, the total bill for an average residential customer using 1,000 kilowatt-hours (KWH) per month would increase 11.8 percent, or $12.39, for a new monthly total bill of $117.15. The bill for a commercial customer using 40 KW for 250 hours would increase 2.6 percent or $22.72 for a total bill of $898.94. The bill for an industrial customer using 20 megawatts for 474 hours would decrease 0.1 percent or $354.09 to $405,471.70. |
• | West Penn Power has requested an increase of $115.5 million or approximately 8.4 percent over current rates. If approved, the total bill for an average residential customer using 1,000 kilowatt-hours (KWH) per month would increase 14.7 percent, or $13.62, for a new monthly total bill of $106.09. The bill for a commercial customer using 40 KW for 250 hours would increase 4.0 percent or $30.26 for a total bill of $784.73. The bill for an industrial customer using 20 megawatts for 474 hours would increase 3.7 percent or $13,618.41 to $384,356.36. |
• | Penelec has requested an increase of $119.8 million or approximately 8.6 percent over current rates. If approved, the total bill for an average residential customer using 1,000 kilowatt-hours (KWH) a month would increase 16.3 percent, or $19.58, for a new monthly bill of $140.04. The bill for a commercial customer using 40 KW for 250 hours would increase 7.3 percent or $70.59 for a total bill of $1,043.98. The bill for an industrial customer using 20 megawatts for 474 hours would increase 0.9 percent or $4,954.38 to $579,674.81. |
• | Met-Ed has requested an increase of $151.9 million or approximately 11.5 percent over current rates. If approved, the total bill for an average residential customer using 1,000 kilowatt-hours (KWH) per month would increase 17.8 percent, or $20.78, for a new monthly bill of $137.34. The bill for a commercial customer using 40 KW for 250 hours would increase 7.2 percent or $63.64 for a total bill of $950.04. The bill for an industrial customer using 20 megawatts for 474 hours would increase 2.1 percent or $9,278.51 to $454,140.75. |
• | Freezing the current base distribution rates through May 31, 2019. |
• | Continuing to provide generation supply to non-shopping customers through a competitive bid process. |
• | Retaining customers' option to shop for a competitive retail electric supplier. |
• | Providing up to $6 million per year in economic development funding for Ohio communities and energy efficiency assistance to low-income customers during the three-year term of the plan. |
• | Supporting continued investment in distribution system reliability. |
Irene M. Prezelj |
Vice President |
Investor Relations |
FirstEnergy Corp. |
76 S. Main Street |
Akron, Ohio 44308 |
Tel 330-384-3859 |
August 4, 2014 |
• | Powering Ohio’s Progress includes an Economic Stability Program. |
• | The Economic Stability Program includes a FERC jurisdictional Purchased Power Agreement (PPA) where The Ohio Companies purchase the output from FirstEnergy Solutions (FES), specifically power generated by its Davis-Besse nuclear plant, Sammis supercritical coal plant and a portion of the Ohio Valley Electric Corporation’s (OVEC) generation output (total of 3,244 MW). |
• | The Program provides a stability mechanism for customers who are estimated to realize a savings of approximately $2 billion over the 15-year period between |
• | The Program does not impact the wholesale competitive bid process or retail competition. The Ohio Companies would continue to utilize competitively bid auctions to procure generation supply for customers who do not choose a competitive retail supplier. |
• | Customers would continue to have the option of shopping for an alternative generation supplier, either individually or as part of a governmental aggregation program. |
• | Overall, the Economic Stability Program delivers significant benefits: |
▪ | With the ongoing operation of these plants, the state of Ohio benefits through the promotion of economic development, retaining thousands of jobs in the state, preserving millions of dollars in tax revenues for Ohio communities, and promotes manufacturing and other industries in Ohio. |
▪ | Ohio utility customers are provided safeguards from volatility and retail price increases as energy and capacity prices rise in future years, saving a projected $2 billion over 15 years through the PPA. |
▪ | FES benefits from the diversity provided by a cost-based source of revenues for approximately 25 percent of its generation portfolio with a rate of return. |
• | Powering Ohio’s Progress continues several beneficial distribution-related provisions from ESP 3 including: |
• | A freeze on The Ohio Companies’ base distribution rates at current levels through May 31, 2019, the requested term of the ESP. |
• | Annual filing of the Significant Excessive Earnings Test (SEET). |
• | Continuation of storm deferrals, collection of lost distribution revenue, and the Delivery Capital Recovery Rider (Rider DCR) with caps increasing annually at $30 million. (See Exhibit 1) |
• | Establishes a non-bypassable placeholder rider for future capital costs arising from governmental directives such as NERC cyber security and physical security. |
• | Provides up to $6 million annually in economic development funding for Ohio communities and energy efficiency assistance for low-income customers. |
• | Smart Meter Technologies (SMT-C): While all of the Pennsylvania Companies are able to recover the costs to implement their Smart Meter Deployment Plan through the existing SMT-C Rider, The Pennsylvania Companies have requested to include in their distribution base rate revenue requirement the test period costs to implement their Smart Meter Deployment Plans. The SMT-C Rider would remain in the tariffs as the mechanism to recover the cost of implementing their Smart Meter Plan, net of savings, in excess of such costs being recovered in base rates in the future. |
• | Storm Damage Cost: Provides for a credit or charge on customer bills to reflect the difference between storm related expenses in base rates and actual storm related expenses and eliminates risk by providing timely recovery of storm costs. The rate would be filed annually on December 1 and charged to residential customers. |
• | Universal Service Rider (USC): Provides for full recovery for the costs of low-income programs. The utility would file annually for the charge to be effective on January 1 of each year and the charge would be collected from residential customers only. The proposed rider mirrors the USC Riders that the PAPUC approved for Met-Ed, Penelec and Penn Power in prior cases. |
Delivery Capital Recovery Rider (Rider DCR) Caps | |
Period | Amount ($M) |
Current: | |
6/1/14-5/31/15 | $195 |
6/1/15-5/31/16 | $210 |
Proposed: | |
6/1/16-5/31/17 | $240 |
6/1/17-5/31/18 | $270 |
6/1/18-5/31/19 | $300 |
Met-Ed | Penelec | Penn Power | West Penn | |
Case Docket Number | R-2014-2428745 | R-2014-2428743 | R-2014-2428744 | R-2014-2428742 |
Last Base Distribution Rate Increase | 1992 | 1986 | 1988 | 1994 |
Proposed Rate of Return | ||||
ROE | 10.90% | 10.90% | 10.9% | 10.9% |
Overall Return | 8.05% | 8.31% | 8.51% | 8.14% |
Capital Structure | 50% Debt, 50% Equity | 50.10% Debt, 49.90% Equity | 49.9% Debt, 50.1% Equity | 49.9% Debt, 50.1% Equity |
Cost of Debt | 5.21% | 5.72% | 6.12% | 5.38% |
Increase in Distribution Net Plant | 50% since 2007 | 53% since 2007 | 380% since 1988 | 122% since 1994 |
Amortization of Storm Costs | $22M | $4M | - | $5M |
Storms | Hurricane Irene, 2011 October Snowstorm, Tropical Storm Lee, Hurricane Sandy, Winter Storm Nika | Hurricane Irene, 2011 October Snowstorm, Tropical Storm Lee | N/A | February 2010 winter storm |
Time Period | Feb 2011 -Sept 2012, Oct 2012, Feb 2014 | Feb 2011 -Sept 2012 | N/A | February, 2010 |
$ Thousands | Met-Ed | Penelec | Penn Power | West Penn |
Distribution Base Rates | $149,328 | $116,499 | $25,379 | $66,825 |
USC Rider | - | - | - | 29,565 |
DSS and HPS Rider | (716) | (524) | (1,074) | 7,351 |
Smart Meter Rider2 | $3,315 | $3,817 | $4,178 | $11,794 |
Total Revenue Increase | $151,927 | $119,792 | $28,483 | $115,535 |
% Change Over Revenues at Existing Rates3 | 11.5% | 8.6% | 8.7% | 8.4% |
2 This amount is in addition to that which is reflected in the August 4 distribution base rate filing. The following amounts were amortized for legacy meters: $11M at Met-Ed, $11M at Penelec, $2M at Penn Power, and $6M at West Penn 3 The percentage was calculated based on total estimated revenue for the fully projected future test year consisting of distribution revenue as well as generation service revenue, with the latter reflecting generation rates equivalent to the Companies’ applicable prices for default service. |