PUCO is investigating the practice of offering consumers a fixed-price electric contract that includes fine print allowing the power supplier to "pass through" a host of indecipherable charges if it wants to.
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View full size The arctic cold weather that slammed Ohio in January will slam consumer wallets and businesses this summer if FirstEnergy Solutions has its way. CLEVELAND, Ohio -- State regulators have opened an investigation into a FirstEnergy company's decision to bill customers a "polar vortex" surcharge.
The Public Utilities Commission of Ohio wants to hear from the customers of FirstEnergy Solutions and any other unregulated power supplier that advertised fixed-price power contracts but is now trying to "pass through" January operational charges.
FirstEnergy Solutions maintains that the pass-through provisions are in some of its contracts, meaning the surcharge is legal. The extra charges did not start with FirstEnergy Solutions.
PJM Interconnection, the non-profit company responsible for managing the high-voltage grid in 13 states, including Ohio, billed FirstEnergy Solutions because soaring demand during January's subzero weather forced grid operators to order extra reserve power. The cost to fire up and keep the extra power plants generating was about $500 million.
PJM has billed every power company in its region for whatever extra power it required during the arctic weather. FirstEnergy Solutions is the only company known to pass on the charges.
The PUCO is considering whether offering a fixed-rate and then slipping language into the fine print of a contract allowing all sorts of charges ought to be banned or at least made more prominent.
"Is such a practice unfair, misleading, deceptive or unconscionable?" the commission posed in its decision announcing the probe.
FirstEnergy Solutions last month said it would bill about 2 million of its 2.7 million retail customers a surcharge for expenses the company will be billed for the reserve power.
The remaining 700,000 customers - including the 500,000 who buy through the Northeast Ohio Public Energy Council, or NOPEC - won't be hit with the surcharge because their contracts specifically forbid it.
FirstEnergy Solutions said other residential and small business customers whose electricity bills show FirstEnergy Solutions as the supplier will see a one-time charge of $5 to $15 between May and July.
Larger commercial and industrial power users will face a one-time charge this summer amounting to 1 to 3 percent of what they pay for electricity annually, according to letters the company has mailed to them.
That has especially rankled businesses struggling to stay competitive. And many of the smaller companies have complained to the PUCO, prompting the investigation.
Many companies also complained to the Ohio Manufacturers' Association.
"We regard this matter as legal contract disputes and won't comment on individual complaints at this time," said Ryan Augsburger, OMA spokesman. "A number of our member companies are working with counsel to review contracts and consider options."
The PUCO has set a 30-day deadline to take written complaints and comments from customers. The case number in the PUCO docket is 14-568-EL-COI.
