Customers of FirstEnergy Solutions will be hit with an additional charge for their electricity within the next few months.
Customers will be required to pay what FES is calling a "RTO Expense Surcharge," said Diane Francis, spokeswoman of FES, an electricity supplier and subsidiary of FirstEnergy Corp.
According to Francis, extremely cold weather in January resulted in record levels of energy use, and throughout the month PJM Interconnection, the regional transmission organization that coordinates reliability and wholesale electricity in the region, initiated emergency operations.
As a result, PJM incurred extremely high ancillary service costs to purchase the power needed to keep the electric system reliable throughout these severe conditions, and PJM billed additional costs to suppliers, such as FirstEnergy Solutions, Francis said. These additional ancillary service charges are considered a "pass through event," Francis said.
This means FES will adjust customers' bills through a one-time charge, which will be about $5 to $15 for an average residential customer and will appear on a
May, June or July bill, Francis said.
"When demand is high and supply is low, prices go up. PJM passed on the costs to suppliers in the PJM system. FirstEnergy Solutions is a large supplier; we got a large portion. We are passing that on as the contract allows," Francis said. "What the PJM charged us in January was greater than all of 2013. We didn't foresee these unpredictable extremes."
FES is notifying its customers by postcard that the one-time charge will be coming.FES chose to pass through a portion of that cost onto customers.
"Once we find out exactly what our share is, we can determine the customers share. It will be based on January usage. Chances are it will be a one-time charge on the June or July bill," Francis said. "We are just exercising an option that the contract allows. It is a one-time pass through."
What FirstEnergy Solutions is doing is legal, according to the Pennsylvania Public Utility Commission.
The company can charge the fee to fixed-rate customers because fixed-rate doesn't always mean you can't be charged more. The terms in contracts signed prior to November allowed charges like this to be passed on.
However, the PUC closed that loophole in November, and FirstEnergy Solutions isn't charging the fee to customers who signed fixed-rate contracts since then, said PUC spokeswoman Jennifer Kocher.
The PUC isn't thrilled about the surcharge being passed on.
"The commissioners are disappointed it is being passed on to consumers, and they want to take a closer look at the action taken by the company," Kocher said.
FirstEnergy Solutions has about 400,000 customers in Pennsylvania.
Meanwhile, New Enter
prise Rural Electric Cooperative and Bedford Rural Electric Cooperative will not be adding surcharges to their customers' bills.
"As a rural electric, we are not adding a surcharge. We set our rates, and they are what they are for a year. We don't add surcharges," said New Enterprise General Manager and CEO Rick Eichelberger. "The majority of the rural electrics are that way. If it costs a little bit more, we absorb it," Eichelberger said.
Valley Rural Electric Cooperative offices were closed on Friday, and no one was available to answer questions.
Mirror Staff Writer Walt Frank is at 946-7467.