Mon Power and Potomac Edison Reach Settlement in Rate Review
- None.
- Rising energy costs may cause concern for customers.
Insights
An energy economist would analyze the implications of the settlement agreement from a macroeconomic viewpoint. The $105 million rate adjustment is a significant figure that reflects the investment in infrastructure to enhance the reliability of the electric system. This investment could lead to an improved energy grid which is crucial for economic development, especially in rural areas. The Infrastructure Investment Pilot Program is particularly noteworthy as it targets these underserved regions, potentially reducing the urban-rural divide in energy access and reliability.
However, the 8% increase in monthly bills for the average residential customer is not trivial. While it is a consequence of necessary investments, it might strain household budgets, particularly in a state like West Virginia, which has areas with lower average incomes. The energy economist would assess the balance between the long-term benefits of grid improvements and the immediate financial impact on consumers, considering the broader economic context of inflation and energy prices.
A utility regulation expert would focus on the regulatory aspects of the settlement agreement filed with the West Virginia Public Service Commission. The fact that the depreciation rates for distribution, transmission and generation facilities have not been updated since 2007 is a critical point. Depreciation is a method for allocating the cost of tangible assets over their useful lives and it is essential for utilities to accurately reflect the aging of their assets and the need for capital to maintain or replace them. The revision of these rates is an overdue step that aligns the company's accounting practices with the current state of its assets.
Furthermore, the proposed changes to the Net Energy Metering Rider, which adjusts the credit customers receive for self-generated energy, could have implications for the adoption of renewable energy solutions by consumers. This adjustment needs to be monitored closely as it can influence the economic viability of customer investments in self-generation and, by extension, the state's progress towards energy independence and sustainability.
From a consumer advocacy perspective, the establishment of an Energy Assistance Outreach Team is a crucial element of the settlement. This team's role in raising awareness and facilitating access to energy assistance programs is vital for mitigating the impact of the rate increase on low-income households. Consumer advocates would scrutinize the effectiveness of these programs and the outreach efforts to ensure that vulnerable populations are adequately supported.
Additionally, the recovery of costs from major storms highlights the increasing frequency and severity of such events, likely due to climate change. Consumer advocates would argue for a balance between ensuring utility companies can recover legitimate costs while also pushing for investments in grid resiliency to minimize future storm-related expenses and outages, which disproportionately affect consumers.
Agreement promotes delivery of safe, reliable & affordable power to
Parties to the rate review settlement include staff of the Public Service Commission of
Jim Myers, President of FirstEnergy's West Virginia Operations: "We're pleased to have reached an agreement that supports our important investments that strengthen the energy grid, funds reliability programs targeting rural communities and offers additional assistance to our customers facing financial hardship. We consistently explore avenues for settling cases to streamline processes and minimize expenses for the state and stakeholders."
Mon Power and Potomac Edison have grown significantly in the nine years since their last base rate review, now serving approximately 550,000 customers in
If approved by the PSC, the
- Investments that have helped create a more reliable and resilient electric system for FirstEnergy's customers in West Virginia.
- An Infrastructure Investment Pilot Program to enhance reliability in rural areas by funding specific, targeted projects such as the construction of lines that provide alternative sources of power from different circuits.
- The launch of an Energy Assistance Outreach Team to enhance the company's ongoing efforts to increase awareness, education and participation in energy assistance programs available to eligible, low-income customers, as well as financial assistance for health and safety improvements.
- Recovery of costs incurred by Mon Power and Potomac Edison from the impact of major storms.
- Depreciation rate changes to cover h costs associated with distribution and transmission facilities and Mon Power's
West Virginia generating plants. Depreciation rates were last updated in May 2007. - Recommendations made in the performance management audit completed at the end of 2023.
The agreement filed on January 23 will be considered by the Commission. If the settlement is approved, the monthly bill for an average residential customer using 1,000 kilowatt hours per month would increase by
The settlement agreement also requests that the Commission decide on a revision to the companies' Net Energy Metering Rider that would adjust the amount customers are credited for the energy they generate.
Rising energy costs may cause concern for customers. To help them manage their bills, Mon Power and Potomac Edison offer budget plans, special payment plans and access to energy assistance programs. To apply or learn more about other utility bill assistance programs, customers are encouraged to visit firstenergycorp.com/billassist or contact customer service at 1-800-686-0022 (Mon Power) and 1-800-686-0011 (Potomac Edison).
Investor Note: For additional information on the filing, visit the new IR - Regulatory Corner in the "Investor Materials" section of the FirstEnergy website at https://investors.firstenergycorp.com.
Mon Power serves about 395,000 customers in 34
Potomac Edison serves about 285,000 customers in seven counties in
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 more than six million customers in
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SOURCE FirstEnergy Corp.
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