Last May, First Energy’s two companies in West Virginia, Monongahela Power and Potomac Edison, filed for a more than $188 million rate hike.
Just under $14 million was stated to be steered towards the company’s “Reliability and Infrastructure Investment Program,” which helps to ensure that the electric grid remains reliable during periods of peak strains.
First Energy in May filed for two separate rate hike options. The first according to the PSC would result in rate hikes that “for an average residential customer using 1,000 kilowatt-hour (kWh) . . . would increase customer bills from $137.86 to $155.75, an increase of $17.89 per month or 13.0 percent.”
The same company also filed an alternative plan called “an adjustment approach” that would take two phases.
“Phase 1 would be a $37.9 million increase or 2.1 percent of total tariff revenue effective August 1, 2026. The increase would be 3.0 percent of total tariff revenue for the residential class, 1.7 percent for the commercial class, 1.3 percent for the industrial class, and 2.0 percent for the street lighting class.”
“Phase 2 would be effective June 1, 2027, and result in an additional increase on total revenues of 2.1 percent with a total increase of $37.6 million. By customer class, the Phase 2 total revenue increase would be 2.9 percent for the residential class, 1.6 percent for the commercial class, 1.3 percent for the industrial class, and 1.9 percent for the street lighting class.”
PSC staff feared that First Energy was “pancaking,” an industry term referring to the filing for the same rate increase twice before the first could be considered. First Energy, however, committed to abandoning the more costly and up-front proposal upon approval of the adjustment approach.
First Energy also provided evidence of inflationary pressures on other companies as part of its case to raise rates.
An official from First Energy testified that the two subsidiary “Companies have placed into service approximately $1 billion of capital and rate base in the West Virginia electric utility system since the 2022 test year from its prior base rate case. The continued investment in electric infrastructure was the primary driver. ”
That said, “The affordability issues, however, caused the Companies to develop the AA alternative.”
Also “due to current circumstances, the Companies agree that there is value in extending the time between base rate cases, levelizing and moderating the magnitude of future rate cases and reducing the time, effort and financial resources that all parties and the Commission must bear in a rate case.”
First Energy also weighed the inflationary penalty on deferring rate hikes, but assumed that a continued trend of rising usage would cover what they might lose to inflation over time.
The PSC determined that “with regard to the spread of the increase that assigns a larger average increase to residential customers, we find the Companies’ allocations to be fair and reasonable” and “there is no downside to approving the AA adjustment.”
It went on to add that “at a time when costs keep increasing, thereby causing rates to increase, we are trying to find new ways to establish rates for the Companies that are reasonable and not discriminatory that help the customers, and that do not require a base rate case every year or year and a half. It is a daunting effort, but we must try.”