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Pa. regulators OK rate case settlements for FirstEnergy utilities

Pennsylvania regulators have approved settlement agreements that provide for a total rate increase of $291.2 million for FirstEnergy Corp.'s utilities.

The Pennsylvania Public Utility Commission on Jan. 19 voted unanimously to adopt the rate case settlements for FirstEnergy's Pennsylvania subsidiaries.

The settlements, which were announced in October 2016, provide for rate increases of $96 million for Metropolitan Edison Co., or Met-Ed; $100.4 million for Pennsylvania Electric Co., or Penelec; $29.2 million for Pennsylvania Power Co., or Penn Power; and $65.6 million for West Penn Power Co.. These numbers include an increase in default service support and hourly pricing default service riders, according to regulatory filings. Absent the riders, the PUC approved an overall $273.2 million increase in annual base rate distribution revenues. The utilities sought an overall rate increase of about $439 million.

The rate hikes are expected to support the utilities' reliability improvement projects, including circuit and substation upgrades, pole replacements, vegetation management and equipment inspections, FirstEnergy said in a news release. "The rate plans also include continued assistance for providing service to low-income customers, about $95.3 million annually," the company said.

The new rates will be effective Jan. 27.

Based on 1,000 kWh of electricity usage per month, FirstEnergy said Met-Ed residential customers will see an average increase in rates of 10.7%, or $13.91; Penelec customers will see an average increase of 12.8%, or $17.62; Penn Power customers will see an average increase of 10.4%, or $13.51; and West Penn Power customers will see an average increase of 7.2%, or $8.09.

Wall Street viewed the rate case deals as another positive step for FirstEnergy, which also received approval in October 2016 from the Public Utilities Commission of Ohio for a three-year, $204 million distribution rider designed to support the company's credit ratings while benefiting customers through grid modernization.

Parties to the Pennsylvania settlements include the state Office of Consumer Advocate and Office of Small Business Advocate, large energy user groups and several individual large customers. (PCUC dockets R-2016-2537349, R-2016-2537352, R-2016-2537355, R-2016-2537359)