Settlement Reached in FirstEnergy Pennsylvania's Rate Review that Supports Enhanced Service Reliability and Customer Assistance Programs

Rhea-AI Summary

FirstEnergy Pennsylvania Electric Company (FE PA), a subsidiary of FirstEnergy Corp. (NYSE: FE), has reached a $225 million settlement in its base rate review, pending approval from the Pennsylvania Public Utility Commission. The agreement aims to expand bill assistance for low-income customers and enable electric grid investments for improved service reliability.

Key points of the settlement include:

• Increased vegetation management investments
• Support for the Long-Term Infrastructure Improvement Plan III
• Selective underground placement of distribution facilities
• Increased funding for Hardship Fund grants
• Improved enrollment in the Pennsylvania Customer Assistance Program
• Hiring 10% more field workforce

If approved, the settlement would result in average monthly bill increases ranging from 1.9% to 6.2% for residential customers using 1,000 kilowatt-hours per month, effective January 1, 2025.

Positive

• Settlement reached to support enhanced service reliability and customer assistance programs
• $225 million agreement balances interests of multiple stakeholders
• Increased investments in vegetation management and grid infrastructure
• $2 million annual increase in Hardship Fund grants for three years
• Improved enrollment process for low-income customer assistance program
• 10% increase in field workforce hiring for five years

Negative

• Rate increases for residential customers ranging from 1.9% to 6.2%
• Higher monthly bills for customers across all FE PA subsidiaries

News Market Reaction – FE

-0.29%

-0.29% Session move

In the trading session that priced this news, FE declined 0.29%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

Comprehensive Agreement Designed to Keep Costs Manageable for Customers  

READING, Pa., Sept. 16, 2024 /PRNewswire/ -- FirstEnergy Pennsylvania Electric Company (FE PA), a subsidiary of FirstEnergy Corp. (NYSE: FE) doing business as Met-Ed, Penn Power, Penelec and West Penn Power, has reached a settlement in its base rate review, subject to the approval of the Pennsylvania Public Utility Commission (PaPUC). The $225 million settlement expands bill assistance for low-income residential customers and enables the company's electric grid investments that support safe and reliable electric service for its Pennsylvania customers.

The settlement balances the interests of all parties to the settlement, who include the Office of the Consumer Advocate, the Office of the Small Business Advocate, the Pennsylvania Public Utility Commission's Bureau of Investigation and Enforcement, the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania, the Met-Ed Industrial Users Group, Penelec Industrial Customer Alliance, the West Penn Power Industrial Intervenors, the International Brotherhood of Electrical Workers Local 459, the Local Union 777 of the International Brotherhood of Electrical Workers, AFL-CIO, the UWUA System Local 102, Walmart, Inc. and the Pennsylvania State University.

John Hawkins, FirstEnergy's President of Pennsylvania: "This settlement will amplify our efforts to connect our lower-income customers with a wide variety of bill assistance programs while also making meaningful upgrades to our electric system to enhance reliability for customers. We appreciate the broad set of stakeholders who participated in open and transparent settlement discussions that resulted in an agreement that balances all interests in our rates proceeding."

The settlement includes investments focused on strengthening the energy grid, enhancing the customer experience and managing bill costs. They include:

• Increasing vegetation management investments to enhance tree trimming and other related work around company power lines to enhance electric service reliability.
• Supporting investments in the electric grid through the Long-Term Infrastructure Improvement Plan III (LTIIP III) to enhance the reliability of power lines and substations.
• Identifying opportunities to selectively place distribution facilities underground to help enhance electric service reliability.
• Allowing the company to continue recovering expenses incurred when restoring electricity to customers following storms and severe weather.
• Increasing annual funding for Hardship Fund grants by $2 million above current levels for a three-year period starting in 2025 and increasing the maximum Hardship Fund grant to $600 to assist eligible customers whose electric service has been or is at risk of termination.
• Implementing a process to use income data from the Pennsylvania Department of Human Services to improve enrollment and retention in FirstEnergy's income-eligible Pennsylvania Customer Assistance Program (PCAP).
• Hiring an incremental 10% to field workforce above the prior year's attrition for five years or until the next base rate review, whichever comes first.

If approved by the PaPUC, the settlement agreement would result in the following increases for residential customers using 1,000 kilowatt-hours per month:

• Met-Ed – average increase of 1.9% or $3.49 for a new monthly bill of $191.19.
• Penelec – average increase of 4.1% or $8.33 for a new monthly bill of $209.29.
• Penn Power – average increase of 4.5% or $8.13 for a new monthly bill of $188.72.
• West Penn – average increase of 6.2% or $9.70 for a new monthly bill of $166.07.

The average monthly bill for FE PA customers would be in line with the statewide average for typical customers served by the other three major electric companies in Pennsylvania. Pending PaPUC approval, FE PA is requesting a Jan. 1, 2025, effective date for the new rates.

Rising energy costs may cause concern for customers. Met-Ed, Penelec, Penn Power and West Penn Power continue efforts to keep costs manageable for customers. To help customers manage their bills, average payment plans, special payment plans and access to energy assistance programs are offered. For more information, please visit firstenergycorp.com/billassist. To learn more about energy efficiency products and programs to help save money, visit energysavepa.com.

Investor Note: For additional information on the filing, visit the IR - Regulatory Corner in the "Investor Materials" section of the FirstEnergy website at investors.firstenergycorp.com.

Met-Ed serves approximately 592,000 customers within 3,300 square miles of eastern and southeastern Pennsylvania. Follow Met-Ed on X, formerly known as Twitter, @Met Ed and on Facebook at facebook.com/MetEdElectric.

Penelec serves approximately 597,000 customers within 17,600 square miles of northern and central Pennsylvania and western New York. Follow Penelec on X @Penelec and on Facebook at facebook.com/PenelecElectric.

Penn Power serves approximately 173,000 customers in all or parts of Allegheny, Beaver, Butler, Crawford, Lawrence and Mercer counties in western Pennsylvania. Follow Penn Power on X @Penn_Power, on Facebook at facebook.com/PennPower, and online at pennpower.com.

West Penn Power serves approximately 746,000 customers in 24 counties within central and southwestern Pennsylvania. Follow West Penn on X @W_Penn_Power and on Facebook at facebook.com/WestPennPower.

FirstEnergy is dedicated to integrity, safety, reliability and operational excellence. Its electric distribution companies form one of the nation's largest investor-owned electric systems, serving customers in Ohio, Pennsylvania, New Jersey, West Virginia, Maryland and New York. The company's transmission subsidiaries operate approximately 24,000 miles of transmission lines that connect the Midwest and Mid-Atlantic regions. Follow FirstEnergy online at firstenergycorp.com and on X @FirstEnergyCorp.

Forward-Looking Statements: This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on information currently available to management. Such statements are subject to certain risks and uncertainties and readers are cautioned not to place undue reliance on these forward-looking statements. These statements include declarations regarding management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "forecast," "target," "will," "intend," "believe," "project," "estimate," "plan" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, which may include the following: the potential liabilities, increased costs and unanticipated developments resulting from government investigations and agreements, including those associated with compliance with or failure to comply with the Deferred Prosecution Agreement entered into July 21, 2021 with the U.S. Attorney's Office for the Southern District of Ohio; the risks and uncertainties associated with government investigations and audits regarding Ohio House Bill 6 as passed by Ohio's 133^rd General Assembly ("HB 6") and related matters, including potential adverse impacts on federal or state regulatory matters, including, but not limited to, matters relating to rates; the risks and uncertainties associated with litigation, arbitration, mediation and similar proceedings, particularly regarding HB 6 related matters, including risks associated with obtaining dismissal of the derivative shareholder lawsuits; changes in national and regional economic conditions, including recession, volatile interest rates, inflationary pressure, supply chain disruptions, higher fuel costs, and workforce impacts, affecting us and/or our customers and those vendors with which we do business; variations in weather, such as mild seasonal weather variations and severe weather conditions (including events caused, or exacerbated, by climate change, such as wildfires, hurricanes, flooding, droughts, high wind events and extreme heat events) and other natural disasters affecting future operating results and associated regulatory actions or outcomes in response to such conditions; legislative and regulatory developments, including, but not limited to, matters related to rates, energy regulatory policies, compliance and enforcement activity, cyber security, and climate change; the risks associated with physical attacks, such as acts of war, terrorism, sabotage or other acts of violence, and cyber-attacks and other disruptions to our, or our vendors', information technology system, which may compromise our operations, and data security breaches of sensitive data, intellectual property and proprietary or personally identifiable information; the ability to meet our goals relating to employee, environmental, social and corporate governance opportunities, improvements, and efficiencies, including our greenhouse gas ("GHG") reduction goals; the ability to accomplish or realize anticipated benefits through establishing a culture of continuous improvement and our other strategic and financial goals, including, but not limited to, overcoming current uncertainties and challenges associated with the ongoing government investigations, executing Energize365, our transmission and distribution investment plan, executing on our rate filing strategy, controlling costs, improving credit metrics, maintaining investment grade ratings, and growing earnings; changing market conditions affecting the measurement of certain liabilities and the value of assets held in our pension trusts may negatively impact our forecasted growth rate, results of operations, and may also cause us to make contributions to our pension sooner or in amounts that are larger than currently anticipated; mitigating exposure for remedial activities associated with retired and formerly owned electric generation assets, including those sites impacted by the recently promulgated legacy coal combustion residual rules; changes to environmental laws and regulations, including, but not limited to, rules recently finalized by the Environmental Protection Agency and the U.S. Securities and Exchange Commission (SEC) related to climate change; changes in customers' demand for power, including, but not limited to, economic conditions, the impact of climate change, emerging technology, particularly with respect to electrification, energy storage and distributed sources of generation; the ability to access the public securities and other capital and credit markets in accordance with our financial plans, the cost of such capital and overall condition of the capital and credit markets affecting us, including the increasing number of financial institutions evaluating the impact of climate change on their investment decisions; future actions taken by credit rating agencies that could negatively affect either our access to or terms of financing or our financial condition and liquidity; changes in assumptions regarding factors such as economic conditions within our territories, the reliability of our transmission and distribution system, generation resource planning, or the availability of capital or other resources supporting identified transmission and distribution investment opportunities; the potential of non-compliance with debt covenants in our credit facilities; the ability to comply with applicable reliability standards and energy efficiency and peak demand reduction mandates; human capital management challenges, including among other things, attracting and retaining appropriately trained and qualified employees and labor disruptions by our unionized workforce; changes to significant accounting policies; any changes in tax laws or regulations, including, but not limited to, the Inflation Reduction Act of 2022, or adverse tax audit results or rulings; and the risks and other factors discussed from time to time in our SEC filings. Dividends declared from time to time on FirstEnergy Corp.'s common stock during any period may in the aggregate vary from prior periods due to circumstances considered by FirstEnergy Corp.'s Board of Directors at the time of the actual declarations. A security rating is not a recommendation to buy or hold securities and is subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating. These forward-looking statements are also qualified by, and should be read together with, the risk factors included in FirstEnergy Corp.'s Annual Report on Form 10-K for the year ended December 31, 2023, Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, Quarterly Report on Form 10-Q for the quarter and other filings with the SEC. The foregoing review of factors also should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on FirstEnergy Corp.'s business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy Corp. expressly disclaims any obligation to update or revise, except as required by law, any forward-looking statements contained herein or in the information incorporated by reference as a result of new information, future events or otherwise.

View original content to download multimedia:https://www.prnewswire.com/news-releases/settlement-reached-in-firstenergy-pennsylvanias-rate-review-that-supports-enhanced-service-reliability-and-customer-assistance-programs-302249121.html

SOURCE FirstEnergy Corp.

FAQ

What is the value of FirstEnergy Pennsylvania's rate review settlement?

The settlement reached in FirstEnergy Pennsylvania's base rate review is valued at $225 million, subject to approval by the Pennsylvania Public Utility Commission.

How will the FE settlement affect residential customer bills?

If approved, the settlement will result in average monthly bill increases ranging from 1.9% to 6.2% for residential customers using 1,000 kilowatt-hours per month, depending on the specific FE PA subsidiary.

When will the new rates take effect for FirstEnergy Pennsylvania customers?

Pending approval from the Pennsylvania Public Utility Commission, FirstEnergy Pennsylvania is requesting an effective date of January 1, 2025, for the new rates.

What customer assistance programs are included in the FE settlement?

The settlement includes increased funding for Hardship Fund grants and improved enrollment in the Pennsylvania Customer Assistance Program (PCAP) for low-income customers.

How will FirstEnergy Pennsylvania improve service reliability under this settlement?

The settlement includes increased investments in vegetation management, support for the Long-Term Infrastructure Improvement Plan III, and selective underground placement of distribution facilities to enhance electric service reliability.