FirstEnergy Corp. reached an agreement to refund $306 million to overcharged Ohio customers over the next four years, the Public Utilities Commission of Ohio announced Monday.
The commission, which regulates electricity, water, gas and other utilities, supports the agreement but must still formally approve it, according to a press release. The agreement is between FirstEnergy on one side and several consumer groups, plus the state Office of the Ohio Consumers’ Counsel, on the other side.
In the settlement announced Monday, FirstEnergy agreed to refunds in the form of reduced utility bills. According to the agreement, the corporation has agreed to refund $96 million in 2021, $80 million in 2022, $60 million in 2023, $45 million in 2024, and $25 million in 2025.
“FirstEnergy worked openly and collaboratively with all parties to understand their concerns, find common ground and reach a unanimous resolution that is truly in the best interests of all our Ohio customers,” said Steven Strah, FirstEnergy president, in a Tuesday press release.
The settlement — talks began in August — involves several legal actions against FirstEnergy and its subsidiaries Ohio Edison Company, The Cleveland Electric Illuminating Company, and The Toledo Edison Company. The litigation concerned FirstEnergy’s Significantly Excessive Earnings tests from 2017 to 2020, audits of the subsidiaries’ energy efficiency riders from 2014 to 2018 and a review of the utilities’ current rate plans.
Besides the Office of Ohio Consumer Counsel, the plaintiffs in the the legal actions were the Ohio Energy Group, Industrial Energy Users-Ohio, The Kroger Co., Nucor Steel Marion, Inc., Ohio Manufacturers’ Association Energy Group, Ohio Partners for Affordable Energy, Ohio Hospital Association, Northeast Ohio Public Energy Council, and Interstate Gas Supply, Inc.
While the new refunds are not directly connected to the bribery scandal connected to subsidizing two struggling Ohio reactors, the new agreement marks the latest in heavy financial penalties levied against FirstEnergy in 2021.
Earlier this year, FirstEnergy paid a $230 million fine in a settlement with the federal and state governments in a bribery scheme involving the company and former Ohio House Speaker Rep. Larry Householder (R), who was subsequently expelled from the House. Householder and four allies were charged in the bribery scheme. Householder and one still face trial. Two have pleaded guilty. The fifth killed himself.
Householder and his allies are accused of writing and nurturing passage of a 2019 bill to increase rates on Ohio utility customers so that the financially struggling Davis-Besse and Perry power plants, operated by former FirstEnergy subsidiary Energy Harbor, would get about a $150 million annual subsidy. The Ohio General Assembly revoked the law in 2021 after the bribery scandal blew up.
Also this year, the general assembly revoked another provision in the controversial bill, which had guaranteed $102 million in annual profits to FirstEnergy, regardless of Ohioans’ actual electric consumption. A few months ago, FirstEnergy agreed to return $26 million collected from ratepayers since Jan. 1, 2020. The refunds will appear as reduced electric bills.
