Pa. energy boss puts heat on one supplier

Pennsylvania's top utility regulator on Tuesday scolded one of the region's biggest electricity suppliers for imposing a surcharge on fixed-rate customers to recover some of its high winter costs.

Robert F. Powelson, chairman of the Pennsylvania Public Utility Commission, chided FirstEnergy Solutions (FES) for notifying customers that they will be hit with a onetime fee ranging from $5 to $15, even though those customers had signed up for fixed-rate deals.

"I think there's a stench associated with the request put forward by this company to recover these costs," Powelson told a hearing Tuesday of the Pennsylvania Senate Consumer Protection and Professional Licensure Committee.

Legislators on Tuesday said they were fielding calls from irate customers over the FirstEnergy surcharge. Powelson can sympathize: He signed up his Chester County home for an FES fixed-rate deal, and faces the charge, too.

"I would think in this world of open and honest disclosure, that fixed means fixed," Powelson said.

The outrage is the latest repercussion to arise after the polar vortex roiled energy markets, hammering natural gas, electricity, and propane customers. Tuesday's hearing was the second legislative inquest into soaring power costs.

Some customers with variable-rate electricity deals saw their monthly bills quadruple. Even apartment dwellers in Philadelphia whose buildings are served by the gas-fueled Veolia Energy steam system are facing huge bills.

Customers on fixed-rate agreements were largely immune from the price spikes until FES sent out notices last week that it was imposing a onetime surcharge to recover "ancillary charges" it had to pay to the region's grid operator, PJM Interconnection Inc.

FirstEnergy characterized the charge as a onetime "pass-through event" that was permitted under its agreement with customers.

Diane Francis, an FES spokeswoman, said in a telephone interview that the surcharge was small compared with the price swings that variable-rate customers endured.

"When you put it in perspective, we're comfortable with this," she said.

But Powelson, who has been a champion of competitive markets, took FES to task.

"We have had no other supplier in the market that has put forth this edict that they're going to recapture these ancillary charges," he said. "I'm a little concerned about the optics of this, and how we're going to have to deal with it."

Ohio regulators last week announced an investigation into the FES surcharge.

The Pennsylvania PUC in November tightened rules to prohibit suppliers from adding fees to fixed rates, so future customers should be spared.

But FES spokeswoman Francis said newer customers would be "given the option of accepting the charge." If they decline, she said, they will be terminated as customers, without penalty, and returned to the local utility.

FES is the retail marketing subsidiary of Akron energy giant FirstEnergy Corp. It has aggressively marketed its low-priced fixed-rate offers across the region, and its offers are typically among the best prices listed on the PUC's website, papowerswitch.com.

FES has 2.7 million retail customers, including 600,000 of Pennsylvania's 2.2 million customers that have switched to competitive suppliers.

Its parent company also owns 10 utilities, including Metropolitan Edison Co., and Jersey Central Power & Light Co.