Update: OMA Energy Group and other intervenors presented testimony this week in opposition to the latest settlement and the overall deal struck between FirstEnergy and several intervenors. OMA Energy Group witness Dr. Ned Hill addressed how the settlement fails the PUCO’s three-part test for assessing whether a settlement should be approved.
First, he explained how the signatories to the overall settlement did not bargain on behalf of customers as a whole but rather sought provisions that benefited their own narrow interests. Second, he illustrated how the benefits extracted by the signatories will harm other customers by requiring them to bear the risks of rate discounts, subsidies, and many other cost provisions that increase costs to customers. Lastly, he stated that the harms to competition and the multitude of cross-subsidies established by the settlement are inconsistent with longstanding regulatory principles.
OMA Energy Group witness John Seryak cited recent load forecast data from PJM and the U.S. Department of Energy which show that FE vastly underestimated the costs that customers could bear under its proposal. Mr. Seryak also explained how the settlement provisions regarding energy efficiency and renewable resources could have a price suppressing effect on the wholesale markets, thereby reducing wholesale prices while increasing costs to customers through Rider RRS under the purchase power agreement construct.
IGS, a longtime outspoken critic of FE’s settlement, recently decided to join as a signatory. As part of its decision to join, IGS attempted to withdraw the testimony it filed in opposition to earlier settlement agreements, but failed. OMA Energy Group and others successfully contested IGS’ unprecedented maneuver on the grounds that it is unlawful to withdraw evidence after it has already been admitted into the record. As this was a stated condition of the agreement between IGS and FE, it is unclear how the PUCO’s ruling will impact their agreement.
It recently came to light that one of the signatories, the Consumer Protection Association (CPA), signed the settlement while it was under investigation for allegations of fraud and allegedly out of business. Moreover, it has now been determined that the CPA filed for bankruptcy. Given these developments, OMA Energy Group and others are investigating the issue and considering how to raise the issue with the PUCO so that CPA’s signatory status is given no weight.
As it did in the AEP PPA Expansion Case, the PUCO denied PJM’s request to participate and file testimony in this case. This is disappointing given the unique perspective that PJM could have offered regarding the effects on competition in the wholesale markets. OMA Energy Group intends to challenge this ruling during the briefing stage.
