Expected cost savings from consolidation
will be returned to customers
GREENSBURG, Pa., Dec. 7, 2023
/PRNewswire/ -- The Pennsylvania Public Utility Commission (PaPUC)
has approved the consolidation of FirstEnergy Corp.'s (NYSE: FE)
Pennsylvania electric distribution
subsidiaries – Met-Ed, Penelec, Penn Power and West Penn Power –
into a single operating company with a continued focus on
delivering safe, reliable and affordable electrical service to more
than two million customers in the state.
In its Dec. 7 order, the PaPUC
approved without modification an August
2023 settlement agreement negotiated with multiple parties
to support the joint March 2023
application to consolidate FirstEnergy's four electric distribution
utilities into a single legal entity called FirstEnergy
Pennsylvania Electric Company (FE
PA). The consolidation is expected to close Jan. 1, 2024, and the electric companies will
continue to do business publicly under the existing, familiar local
brand names – Met-Ed, Penelec, Penn Power and West Penn Power.
In addition, transmission assets owned and operated by West Penn
Power will be transferred to Keystone Appalachian Transmission
Company (KATCo). As a distribution-only company, FE PA will focus its investments solely on
serving its local customers and KATCo will focus solely on
transmission investments. FE PA will
not be responsible for financing transmission projects driven by
ever-changing grid requirements and that potentially benefit
utility customers in distant regions.
Scott Wyman, president of
FirstEnergy's Pennsylvania
operations: "We anticipate our consolidated operations will
produce cost savings, which will be returned to our customers as
part of future rate reviews. The transition to a single company
will be seamless and should provide long-lasting benefits to
customers, regulators, stakeholders and employees alike as we
continue to deliver safe and reliable electric service to our
customers."
Under the terms of the approved consolidation settlement,
income-eligible customers will receive a total of $650,000 in bill assistance over five years. The
settlement also outlines a mechanism for tracking cost savings
realized through consolidated operations.
Following consolidation:
- Customers will continue to receive service from the familiar
electric company brands that currently deliver their
electricity.
- The four electric companies will use their existing names for
billing and other customer-facing purposes.
- Customer rates and terms and conditions of service will not
change because of the consolidation.
- No changes will be made to the Universal Service Programs,
Pennsylvania Customer Assistance Programs for lower-income
customers, Energy Efficiency programs and Default Service
programs.
- Any changes to customer rates, terms and conditions and
programs will be addressed in future base rate reviews and other
proceedings.
As a larger, combined company, FE
PA anticipates gaining greater access to capital at more
favorable interest rates to invest in projects to improve customer
service and further enhance the energy grid. Savings associated
with lower interest rates and borrowing costs will benefit
customers.
The companies received approval to consolidate from the New
York Public Service Commission on Nov. 20,
2023, and in a related proceeding, the Federal Energy
Regulatory Commission (FERC) approved the companies' consolidation
application on Aug. 14, 2023.
Met-Ed serves approximately 587,000 customers within 3,300
square miles of eastern and southeastern Pennsylvania. Follow Met-Ed on X, formerly
known as Twitter, @Met Ed and on Facebook at
facebook.com/MetEdElectric.
Penelec serves approximately 588,000 customers within 17,600
square miles of northern and central Pennsylvania. Follow Penelec on X @Penelec and
on Facebook at facebook.com/PenelecElectric.
Penn Power serves more than 170,000 customers in all or parts of
Allegheny, Beaver, Butler, Crawford, Lawrence and Mercer counties in western Pennsylvania. Follow Penn Power on X
@Penn_Power, on Facebook at facebook.com/PennPower, and online at
pennpower.com.
West Penn Power serves approximately 737,000 customers in 24
counties within central and southwestern Pennsylvania. Follow West Penn Power on X
@W_Penn_Power and on Facebook at facebook.com/WestPennPower.
FirstEnergy is dedicated to integrity, safety, reliability, and
operational excellence. Its 10 electric distribution companies form
one of the nation's largest investor-owned electric systems,
serving customers in Ohio,
Pennsylvania, New Jersey, West
Virginia, Maryland, and
New York. The company's
transmission subsidiaries operate approximately 24,000 miles of
transmission lines that connect the Midwest and Mid-Atlantic
regions. Follow FirstEnergy online at firstenergycorp.com and on X
@FirstEnergyCorp.
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SOURCE FirstEnergy Corp.