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Ohio Supreme Court refuses to reconsider FirstEnergy distribution rider decision

The Supreme Court of Ohio will not reconsider its earlier decision to overturn state regulators' approval of a distribution rider that allowed FirstEnergy Corp.'s Ohio utilities to collect up to $204 million per year from customers.

The state's highest court on Aug. 20 denied the request for reconsideration, which FirstEnergy subsidiaries Ohio Edison Co., Cleveland Electric Illuminating Co. and Toledo Edison Co. made in July.

The court ruled June 19 that the annual distribution modernization rider, or DMR, approved for the utilities is "unlawful and unreasonable." The court remanded the case to the Public Utilities Commission of Ohio, or PUCO, with instructions to remove the DMR from the utilities' electric security plans.

PUCO in October 2016 approved the three-year rider with a possible two-year extension in an effort to protect FirstEnergy's credit rating and ability to make necessary grid investments considered beneficial to customers.

FirstEnergy and its Ohio utilities have been collecting revenue under the DMR since Jan. 1, 2017, and lowered recovery to an estimated $168 million in 2018 and 2019 in response to federal tax reform. The Ohio utilities filed for a two-year extension of the rider in February.

State law prohibits ratepayers from receiving any refund for money collected under the rider since no refund mechanism was attached. However, the utilities proactively filed with PUCO to make the DMR charges billed during the reconsideration period, which began July 1, subject to refund should the court ultimately order that the rider be removed.

FirstEnergy President and CEO Charles Jones Jr. on an earnings call in late July said the court's decision would not hamper the company's long-term spending plans.

FirstEnergy spokesman Mark Durbin said now that the court has denied the reconsideration request, the utilities will wait for direction from PUCO as to what the next steps and time frame will be for the refunds and what happens to the rider for the remainder of the year.