8-KRegulation FDExhibits & Filings

FIRSTENERGY CORP 8-K Report, Regulation FD Disclosure (May 2, 2016)

Filed May 2, 2016For Securities:FE

Summary

FirstEnergy Corp. (FE) filed an 8-K on May 2, 2016, to disclose a letter sent to the investment community regarding an ongoing regulatory issue with their Ohio electric utility operating companies and the Public Utilities Commission of Ohio (PUCO). Specifically, the filing addresses the PUCO's approval, with modifications, of Electric Security Plan (ESP) IV and a subsequent Federal Energy Regulatory Commission (FERC) order that rescinded an affiliate waiver crucial for the ESP IV Power Purchase Agreement (PPA). The FERC order, issued on April 27, 2016, has prevented the implementation of the ESP IV PPA, which was set to begin on June 1, 2016. FirstEnergy's Ohio subsidiaries have filed an Application for Rehearing and supporting testimony with the PUCO to address these developments. Investors should note that this regulatory uncertainty could impact future operations and financial performance related to these Ohio entities.

Key Highlights

  • 1FirstEnergy's Ohio operating companies are pursuing a rehearing with the PUCO regarding modifications to their Electric Security Plan (ESP) IV.
  • 2A critical affiliate waiver for the ESP IV Power Purchase Agreement (PPA) between the Ohio Companies and FirstEnergy Solutions Corp. (FES) was rescinded by FERC.
  • 3The FERC decision prevents the ESP IV PPA from being implemented as scheduled on June 1, 2016.
  • 4The company has filed supporting testimony with the PUCO as part of its rehearing application.
  • 5This regulatory development introduces uncertainty regarding the future of the ESP IV and its associated PPA.
  • 6The filing includes extensive forward-looking statements detailing various risks and uncertainties facing the company.

Frequently Asked Questions

The main issue is a regulatory challenge concerning FirstEnergy's Electric Security Plan (ESP) IV in Ohio. The Public Utilities Commission of Ohio (PUCO) approved ESP IV with modifications, but the Federal Energy Regulatory Commission (FERC) rescinded a key affiliate waiver needed for the ESP IV Power Purchase Agreement (PPA), preventing its implementation.

The FERC's order rescinded the affiliate waiver between FirstEnergy's Ohio operating companies and FirstEnergy Solutions Corp. (FES). This decision prevents the ESP IV PPA, which was to commence on June 1, 2016, from being implemented.

FirstEnergy's Ohio electric utility operating companies have filed an Application for Rehearing and supporting testimony with the Public Utilities Commission of Ohio (PUCO) to address the modifications made to ESP IV and the implications of the FERC's decision.

Investors can find information on the PUCO's ESP IV docket by searching Case No. 14-1297-EL-SSO on www.puco.ohio.gov. Information on the ESP IV PPA docket can be found on www.ferc.gov by searching Docket No. EL16-34-000.