8-KOther Events

FIRSTENERGY CORP 8-K Report, Corporate Update (Aug 30, 2007)

Filed August 30, 2007For Securities:FE

Summary

This Form 8-K filing from FirstEnergy Corp. (FE) and its Ohio subsidiaries (Ohio Edison, Cleveland Electric Illuminating, and Toledo Edison) addresses a significant development regarding the Rate Certainty Plan (RCP). On August 29, 2007, the Supreme Court of Ohio ruled that the Public Utilities Commission of Ohio (PUCO) improperly allowed the companies to recover deferred increased fuel costs through future distribution rate cases or to use excess fuel-cost recovery for other purposes. The Court found that fuel costs are generation-related, not distribution-related, and remanded the issue to the PUCO for further review. In response, FirstEnergy's subsidiaries intend to contest the Court's interpretation by filing a Motion for Reconsideration. Concurrently, they plan to submit an application to the PUCO to outline a current recovery plan for these fuel costs. If the Court upholds its original order, the application to PUCO may be withdrawn. The companies will continue deferring these fuel costs, which totaled approximately $154 million ($78 million for Ohio Edison, $53 million for CEI, and $23 million for Toledo Edison) as of June 30, 2007, pending the resolution of these legal and regulatory actions.

Key Highlights

  • 1Supreme Court of Ohio ruled against the PUCO's approval of FirstEnergy's subsidiaries' Rate Certainty Plan (RCP) regarding deferred fuel cost recovery.
  • 2The Court found that allowing recovery of deferred fuel costs through distribution rates violated Ohio law.
  • 3The case has been remanded to the PUCO for further consideration.
  • 4FirstEnergy subsidiaries will file a Motion for Reconsideration with the Supreme Court of Ohio.
  • 5An application will be filed with the PUCO to propose a plan for current fuel cost recovery.
  • 6As of June 30, 2007, deferred fuel costs, including interest, totaled $154 million across the three Ohio subsidiaries.
  • 7The companies intend to continue deferring these fuel costs pending the legal and regulatory outcomes.

Frequently Asked Questions

The Supreme Court of Ohio ruled that the Public Utilities Commission of Ohio (PUCO) improperly allowed FirstEnergy's Ohio subsidiaries (Ohio Edison, CEI, and Toledo Edison) to recover deferred increased fuel costs through future distribution rate cases. The Court stated that fuel costs are part of generation, not distribution, and remanded the issue to the PUCO.

As of June 30, 2007, the total deferred fuel costs, including interest, for Ohio Edison, The Cleveland Electric Illuminating Company, and The Toledo Edison Company were $78 million, $53 million, and $23 million, respectively, totaling approximately $154 million.

FirstEnergy's subsidiaries plan to file a Motion for Reconsideration with the Supreme Court of Ohio to challenge its interpretation. They will also file an application with the PUCO to propose a plan for the current recovery of these fuel costs.

No, the companies intend to continue deferring the fuel costs pursuant to the RCP while awaiting the Court's decision on the Motion for Reconsideration and the PUCO's action on their proposed recovery plan.