Ohio regulators have officially rolled back a distribution rider that allowed FirstEnergy Corp.'s Ohio utilities to collect up to $204 million per year from customers.
The Public Utilities Commission of Ohio on Sept. 26 removed the annual distribution modernization rider, or DMR, collected by FirstEnergy subsidiaries Ohio Edison Co., Cleveland Electric Illuminating Co. and Toledo Edison Co. as part of their electric security plans. The utilities also must refund money collected from customers under the rider since July 2.
The Supreme Court of Ohio found June 19 that the PUCO's approval of the annual distribution rider was "unlawful and unreasonable" and that conditions placed on the recovery of revenue were "meaningless." The state's highest court remanded the case to the PUCO with instructions to remove the DMR from the utilities' electric security plans.
The court on Aug. 20 denied a request for reconsideration filed July 1 by the utilities.
The 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.
The Ohio Supreme Court, in its initial ruling, pointed out that there are "no directives or timelines regarding specific distribution-modernization projects" attached to the rider.
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. State law prohibits ratepayers from receiving any refund for money collected under the rider since no refund mechanism was attached.
The utilities, however, agreed to refund customers any money collected under the rider during the reconsideration period.
(PUCO docket 14-1297-EL-SSO)
