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MORGANTOWN - The Public Service Commission has approved a two-step rate increase proposal for FirstEnergy sisters Mon Power and Potomac Edison.
In a Friday announcement, the PSC said the companies could have a $37.9 million rate increase, which took effect on Aug. 1; and a $37.6 million rate increase on June 1, 2027.
The new rates reflect a $3.65 monthly increase in average residential rates and a 1.7% increase for commercial rates this year, followed next year by a $4.01 residential rate increase and a 1.6% increase for commercial classes.
(This is slightly lower than originally discussed. As we reported after the companies filed their request on May 15, the initial monthly increase for an average residential customer would have been $4.12, with the 2027 increase $4.11.)
Under the approved rates, the average monthly residential bill will rise from $137.86 to $145.52 (5.6%).
The companies in May proposed two alternative rate increase options. The one the PSC approved is called an "Inflation and Investment Adjustment," intended to spread smaller increases over time instead of one larger increase.
"The other is a traditional rate adjustment based on work already completed to strengthen the electric system and includes a proposed program focused on reliability and future infrastructure investments."
The release said they are asking the PSC "to review electric rates so the companies can keep investing in a safe, reliable electric system that is better prepared for severe weather, while keeping costs in mind."
The other option, which the companies will not pursue, was a traditional "Base Rate Adjustment," the companies propose an adjustment of $188.4 million. Under this proposal, average monthly residential bills would have increased $17.89 per month, or 13%.
After the companies submitted the two options, PSC staff opposed the proposal, saying the companies were engaging in "pancaking": wrongly filing two separate rate cases at the same time under the guise of a single case filing.
The PSC disagreed with staff, accepting the companies’ argument that they did not file two general rate cases at the same time but had presented the PSC with two choices; pancaking is when a company files a new general rate case while another general rate case is pending. No base rate case was pending prior to this filing.
Under the PSC order, the companies will submit no general base rate filing before April 1, 2028, and no rate increase from such a filing would take effect until approximately March 2029.
The PSC called the two-step proposal "a reasonable and worthwhile rate experiment." Ratepayers will have lower rates under this plan, and there will be a longer time between base rate increase filings.
"At a time when costs keep increasing, thereby causing rates to increase," the PSC said, "we are trying to find new ways to establish rates for the companies that are reasonable and not discriminatory, that help the customers and that do not require a base rate case every year or year and a half.
The decision follows a similar ruling involving Appalachian Power Co. and Wheeling Power Co.