Summary
FirstEnergy Corp. announced on April 9, 2015, that its Pennsylvania-based utility subsidiaries, including Penelec, Penn Power, West Penn, and Met-Ed, received approval from the Pennsylvania Public Utility Commission (PUC) for distribution rate increases. These approved settlements will result in an aggregate increase in annual distribution revenues of approximately $292.8 million across these subsidiaries, effective May 3, 2015. The rate adjustments are tied to significant investments in service reliability enhancements, recovery of deferred storm costs, and other operational expenses, alongside commitments to customer service standards.
Key Highlights
- 1Pennsylvania PUC approved distribution rate increases for FirstEnergy's subsidiaries: Penelec, Penn Power, West Penn, and Met-Ed.
- 2Total approved annual increase in distribution revenues is approximately $292.8 million.
- 3Penelec will see an increase of $90.8 million, Penn Power $15.9 million, West Penn $96.8 million, and Met-Ed $89.3 million.
- 4New rates are scheduled to become effective on May 3, 2015.
- 5The approved rate increases will fund $87.7 million in additional annual operating expenses, including service reliability improvements, storm cost amortization, and legacy meter costs.
- 6The settlements include commitments to meet specific customer call center wait times and service reliability standards.
- 7This filing is made under Regulation FD Disclosure.
Frequently Asked Questions
The primary impact for investors is the approval of significant rate increases for FirstEnergy's Pennsylvania utility subsidiaries. This is expected to boost annual distribution revenues by approximately $292.8 million, which should positively affect the financial performance of these regulated segments.
The new rates are effective starting May 3, 2015. Investors can expect the increased revenue to begin being recognized from this date onwards, subject to the specific billing cycles and revenue recognition policies of each subsidiary.
The additional revenue is allocated to cover approximately $87.7 million in increased annual operating expenses. This includes investments in enhancing distribution system reliability, recovering costs related to past storms, amortizing legacy meter costs, providing assistance for low-income customers, and establishing storm reserves for each utility.
Yes, the settlements include commitments from the utilities to meet certain customer service standards, specifically regarding wait times for customer call centers and overall service reliability.