FirstEnergy's Pennsylvania Subsidiaries Receive Approval to Consolidate into Single Operating Company

Rhea-AI Summary

FirstEnergy Corp. (NYSE: FE) receives approval from the Pennsylvania Public Utility Commission to consolidate its electric distribution subsidiaries, expected to produce cost savings for customers.

Positive

• The consolidation is expected to produce cost savings for customers.
• Income-eligible customers will receive a total of $650,000 in bill assistance over five years.
• The consolidation will result in a seamless transition and long-lasting benefits to customers, regulators, stakeholders, and employees.
• The consolidation will not change customer rates, terms, and conditions of service.
• Consolidation approval has been received from the New York Public Service Commission and the Federal Energy Regulatory Commission.

Negative

• None.

Expected cost savings from consolidation will be returned to customers

GREENSBURG, Pa., Dec. 7, 2023 /PRNewswire/ -- The Pennsylvania Public Utility Commission (PaPUC) has approved the consolidation of FirstEnergy Corp.'s (NYSE: FE) Pennsylvania electric distribution subsidiaries – Met-Ed, Penelec, Penn Power and West Penn Power – into a single operating company with a continued focus on delivering safe, reliable and affordable electrical service to more than two million customers in the state.

In its Dec. 7 order, the PaPUC approved without modification an August 2023 settlement agreement negotiated with multiple parties to support the joint March 2023 application to consolidate FirstEnergy's four electric distribution utilities into a single legal entity called FirstEnergy Pennsylvania Electric Company (FE PA). The consolidation is expected to close Jan. 1, 2024, and the electric companies will continue to do business publicly under the existing, familiar local brand names – Met-Ed, Penelec, Penn Power and West Penn Power.

In addition, transmission assets owned and operated by West Penn Power will be transferred to Keystone Appalachian Transmission Company (KATCo). As a distribution-only company, FE PA will focus its investments solely on serving its local customers and KATCo will focus solely on transmission investments. FE PA will not be responsible for financing transmission projects driven by ever-changing grid requirements and that potentially benefit utility customers in distant regions.

Scott Wyman, president of FirstEnergy's Pennsylvania operations: "We anticipate our consolidated operations will produce cost savings, which will be returned to our customers as part of future rate reviews. The transition to a single company will be seamless and should provide long-lasting benefits to customers, regulators, stakeholders and employees alike as we continue to deliver safe and reliable electric service to our customers."

Under the terms of the approved consolidation settlement, income-eligible customers will receive a total of $650,000 in bill assistance over five years. The settlement also outlines a mechanism for tracking cost savings realized through consolidated operations.

Following consolidation:

• Customers will continue to receive service from the familiar electric company brands that currently deliver their electricity.
• The four electric companies will use their existing names for billing and other customer-facing purposes.
• Customer rates and terms and conditions of service will not change because of the consolidation.
• No changes will be made to the Universal Service Programs, Pennsylvania Customer Assistance Programs for lower-income customers, Energy Efficiency programs and Default Service programs.
• Any changes to customer rates, terms and conditions and programs will be addressed in future base rate reviews and other proceedings.

As a larger, combined company, FE PA anticipates gaining greater access to capital at more favorable interest rates to invest in projects to improve customer service and further enhance the energy grid. Savings associated with lower interest rates and borrowing costs will benefit customers.

The companies received approval to consolidate from the New York Public Service Commission on Nov. 20, 2023, and in a related proceeding, the Federal Energy Regulatory Commission (FERC) approved the companies' consolidation application on Aug. 14, 2023.

Met-Ed serves approximately 587,000 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 588,000 customers within 17,600 square miles of northern and central Pennsylvania. Follow Penelec on X @Penelec and on Facebook at facebook.com/PenelecElectric.

Penn Power serves more than 170,000 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 737,000 customers in 24 counties within central and southwestern Pennsylvania. Follow West Penn Power on X @W_Penn_Power and on Facebook at facebook.com/WestPennPower.

FirstEnergy is dedicated to integrity, safety, reliability, and operational excellence. Its 10 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.

 

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SOURCE FirstEnergy Corp.

FAQ

What is the ticker symbol for FirstEnergy Corp.?

The ticker symbol for FirstEnergy Corp. is FE.

What is the expected cost savings from the consolidation of FirstEnergy Corp.'s Pennsylvania electric distribution subsidiaries?

The consolidation is expected to produce cost savings for customers.

How much bill assistance will income-eligible customers receive?

Income-eligible customers will receive a total of $650,000 in bill assistance over five years.

What changes will occur for customers due to the consolidation?

Customer rates, terms, and conditions of service will not change because of the consolidation.

What approvals have been received for the consolidation?

Consolidation approval has been received from the New York Public Service Commission and the Federal Energy Regulatory Commission.