COLUMBUS, Ohio — State regulators have approved a plan allowing FirstEnergy Corp. to impose electricity rate increases totaling $132.5 million a year plus taxes over the next three years.
The Public Utilities Commission of Ohio unanimously approved the plan Wednesday. The taxes bring the total increase to $204 million annually.
The commission estimates a household using an average of 750 kilowatt-hours of electricity a month would see monthly bills increase $3 a month, or $36 a year.
The increase will run three years, although Akron-based FirstEnergy would be allowed to request a two-year extension.
The company is disappointed the commission didn’t approve higher surcharges FirstEnergy said it needs to upgrade and modernize the company’s local electricity delivery system for its 1.9 million customers. FirstEnergy had sought an eight-year subsidy that would have cost customers at least $558 million a year.
A statement from FirstEnergy CEO Charles Jones said the amount granted by the commission is insufficient to cover investments needed to ensure reliability for customers in the future.
“The decision also fails to recognize the significant challenges that threaten Ohio utilities’ ability to effectively operate,” Jones said.
Opponents of FirstEnergy’s proposal have included environmental, consumer and business groups that have called the increases a bailout for the utility. They also were unhappy with Wednesday’s order.
“Unfortunately, consumers will pay higher electric bills to subsidize their utility,” said Ohio Consumers’ Counsel Bruce Weston. He said consumers should be paying lower electric bills that reflect lower energy market prices created by independent companies with natural gas-fired power plants.
Trish Demeter, with the Ohio Environmental Council, said FirstEnergy’s customers will “be on the hook for millions of dollars” for business mistakes the company made.
The Ohio Manufacturers’ Association also opposes the increases.
The revised plan comes after federal officials struck down the commission’s approval in March of a plan that would have required customers to directly subsidize the utility’s aging power plants.
The commission explained in Wednesday’s order that the approved increase is intended to help FirstEnergy avoid a credit rating downgrade that would limit its ability to borrow to make any upgrades in its distribution system.