Refunds from FirstEnergy renew calls for PUCO reform

FirstEnergy will refund customers of its three utilities more than $306 million after a long fight over the way it calculates rates and profits.

The refund is the result of a utility regulator mechanism known as the "significantly excessive earnings test" or SEET, which determines if a company charged too much on electric bills.

The path towards getting this refund was long and included several challenges in court and with the Public Utilities Commission of Ohio over what should and should not be considered in that earnings test.

The Office of the Ohio Consumers' Counsel (OCC) fought against a PUCO decision not to include a specific electric bill fee, known as the Distribution Modernization Rider, in that test. The OCC said leaving that rider out of the SEET would ignore a large pot of revenue, allowing FirstEnergy to avoid refunds. The Ohio Supreme Court ruled in favor of the OCC and sent the case back to the PUCO.

Rachael Belz is executive director of the consumer advocacy group Ohio Citizen Action. She says this is further proof the PUCO needs to be reformed in order to prioritize consumers.

"I don't think there can be a conversation about reform without the governor of Ohio," says Belz, noting that Gov. Mike DeWine (R-Ohio) needs to step in to help improve the PUCO.

Belz says reform should include more consumer input, more transparency in the decision-making process, and better consumer representation on the commission.

The OCC has made similar calls for reform after the Ohio Supreme Court ruled against a PUCO decision that was favorable for FirstEnergy last month. Similar rulings were made in recent years.

The refunds are for customers of FirstEnergy's three utilities; Cleveland Electric Illuminating Company, Ohio Edison, and Toledo Edison. The average ratepayer will get about $85 back over the course of five years.

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