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Ohio Consumers’ Counsel says FirstEnergy’s rate increase request should be reduced by more than $300 million

Proposes new investigation of service reliability

COLUMBUS, Ohio - March 28, 2008 (revised version) - A proposed distribution rate increase by FirstEnergy should be cut by more than $300 million and a new investigation is needed to address the utility’s service reliability, according to the Office of the Ohio Consumers’ Counsel (OCC). The OCC proposes that the Public Utilities Commission of Ohio (PUCO) order a comprehensive review of FirstEnergy reliability practices. The review would include the determination of measures to increase reliability and/or penalties against FirstEnergy.

In a nearly 100-page filing to be submitted later today to the PUCO, the OCC laid out evidence by its lawyers, accountants and economists that found millions of dollars in FirstEnergy’s rate hike request that should not be collected from consumers. In addition, the PUCO’s recent evidentiary hearing and series of local public hearings brought to the forefront reports about the lack of reliable service FirstEnergy is providing to some of its customers.

“Consumers – who already have high monthly bills – should not be required to pay more than is justified. The PUCO should protect customers from paying any unsupportable costs and conduct an investigation to determine penalties if FirstEnergy failed to provide reliable service,” said Janine Migden-Ostrander, Consumers’ Counsel.

FirstEnergy’s Cleveland Electric Illuminating has failed to meet reliability targets for many years – even less demanding targets set by the PUCO staff in agreement with the utility, for 2006 and 2007. Testimony by FirstEnergy in the rate case’s evidentiary hearing highlighted a lack of serious attention to the many service quality problems that have plagued customers over the years.

“FirstEnergy should be held accountable to provide service for which customers’ hard-earned money is supposed to be paying,” said Migden-Ostrander.

The OCC has made a series of recommendations in its filing to remedy the problems, which includes a PUCO-ordered investigation and penalties for instances of noncompliance with the PUCO’s rules and the failure to meet performance targets.

FirstEnergy filed with the PUCO to collect $340 million more in annual revenue from all customers (residential, commercial and industrial), beginning in 2009. Distribution rates generally recover a utility’s costs for local facilities and equipment such as poles and wires.

The OCC’s filing follows approximately three weeks of evidentiary hearings in Columbus and a dozen PUCO local public hearings held throughout FirstEnergy’s Cleveland Electric Illuminating, Ohio Edison and Toledo Edison service areas in March. In total, more than 600 consumers attended local public hearings held in FirstEnergy service areas, including Akron, Austintown, Barberton, Cleveland, Geneva, Mansfield, Maumee, Sandusky, Shaker Heights, Springfield, Toledo and Wauseon.

For consumers who were unable to attend the local public hearings but wish to comment on the proposed rate increase or their service issues, they can send letters to the PUCO. All letters and envelopes should reference Case Number 07-551-EL-AIR and should be sent to the Public Utilities Commission of Ohio, Attn: Docketing Division, 180 E. Broad Street, Columbus, OH 43215.

Editor’s note: Transcripts of several of the PUCO’s local public hearings for the proposed FirstEnergy rate increase (Case No. 07-551-EL-AIR) featuring consumer testimony are available through the following links:

Akron: http://dis.puc.state.oh.us/TiffToPDf/A1001001A08C11B45428D81771.pdf

Austintown: http://dis.puc.state.oh.us/TiffToPDf/A1001001A08C12B34949E20967.pdf

Barberton: http://dis.puc.state.oh.us/TiffToPDf/A1001001A08C14B62119I75942.pdf

Cleveland: http://dis.puc.state.oh.us/TiffToPDf/A1001001A08C24B51033G48870.pdf

Geneva: http://dis.puc.state.oh.us/TiffToPDf/A1001001A08C26B71119B16596.pdf

Maumee: http://dis.puc.state.oh.us/TiffToPDf/A1001001A08C27B05912F85398.pdf

Wauseon: http://dis.puc.state.oh.us/TiffToPDf/A1001001A08C27B05912I19952.pdf

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at www.pickocc.org.