Energy, State Government

PSC: FirstEnergy says Ohio lobbying scandal had no effect on West Virginia bills

MORGANTOWN — An independent audit into the finances of FirstEnergy sisters Mon Power and Potomac Edison found that West Virginia customers rates were not affected by what has been called the Ohio lobbying scandal.

Raymond Valdes, director of rates and regulatory affairs for the companies, made the statement during a Thursday evidentiary hearing on the base-rate case before the Public Service Commission. The PSC issued a release on the statement on Friday.

In August, the companies and the PSC agreed to an accounting firm, Van Reen Accounting of Rhode Island, to perform a “Focused Management Audit” in connection with this rate case in the Ohio lobbying scandal.

A Focused Management Audit is an in-depth investigation of one or several specific areas of a utility’s management and operations. The audit concerned lobbying expenses of Ohio-based FirstEnergy, which paid a $230 million penalty in 2021 after being charged with wire fraud concerning legislation — HB 6 — passed in Ohio in 2019.

Van Reen completed the audit last Dec. 28.

During the hearing, PSC chair Charlotte R. Lane asked Valdes, “Did the Van Reen study find any rate impact or any impact on West Virginia Mon Power or PE customers arising out of the Ohio scandal?”

Valdes answered, “It found that there were no — the scandal known as House Bill 6, it found that there were no charges in customer rates as a result of that. I think it’s the very first page. There’s an executive summary. They go in a little bit more detail, but it’s one of the very first items that they address that found no evidence of any House Bill 6 charges and customer rates.”

“OK,” Lane responded. “Well, that’s good to know.”

The Dominion Post previously reported that the PSC said in August it did not believe the Ohio scandal had any bearing on Mon Power/Potomac Edison rates in West Virginia, or that the companies did any similar lobbying at the West Virginia Capitol. Any expenses on a utility’s books related to illegal activities would be excluded from rate recovery.

But in a Dec. 26 filing, on pages 251-252 of a 493-page document, FirstEnergy witness Tracy Ashton corrected prior testimony about costs associated with HB 6, where she said no costs were passed to West Virginia customers.

Costs related to HB 6 were incurred after 2013, she said in her new testimony, and FirstEnergy did not calculate the impact of those costs on the companies’ vegetation management surcharge or its federal air pollution compliance costs.

“FirstEnergy has since estimated that it is possible that HB 6 costs and certain non-recoverable and non-operating costs could have been applied to these projects.”

They estimated the figure at $53,000. The Van Reen audit findings were released after Ashton’s testimony.

Mon Power, Potomac Edison and the various parties involved in the companies’ base-rate increase case filed a proposed settlement with the PSC on Jan. 23 and await the PSC’s approval.

They’ve settled on an increase of $105 million, a 6.4% overall hike, effective March 27. The companies said the settlement will increase the average monthly residential bill by 7.9% — $9.94.

The companies’ request to cut in half the credit for net-metering for home solar customers was not included in the settlement and the parties have asked the PSC to decide on that.


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