FirstEnergy/Allegheny Merger a Mess for Rate Payers

A couple of years ago, Ohio-based FirstEnergy bought the financial disaster that was Allegheny Energy, including Allegheny’s two WV regulated utilities, Mon Power and Potomac Edison.  At the time, there was all the usual blather about synergies and other nonsense.

Now, two years later, FirstEnergy still can’t manage to accurately read customers’ electric meters or produce decipherable monthly bills.  Twice in the last year, I have received multiple bills in the same envelope, including bills that appear to be corrections for past months’ billing.  I have called FirstEnergy’s customer service and each time was told that this was a problem resulting from merging Allegheny’s billing software with FirstEnergy’s system.  So much for synergies.

Potomac Edison customers in WV’s Eastern Panhandle and in western MD have seen drastic cut backs in monthly meter readings and have faced estimated bills for months in a row.  This is a violation of MD’s PSC rules that require meters to be read by electric company employees at least once every two months.

Keryn has been following developments in MD and has a detailed story of how the MD PSC has just opened an investigation of FirstEnergy’s shady billing practices.  WV legislators have also been receiving a flood of complaints from Eastern Panhandle constituents about Potomac Edison’s billing problems.

Keryn points out that FirstEnergy doesn’t want to raise rates in MD to cover adequate meter reading service because MD rate payers are paying for the company’s operating overhead and capital costs with an unusually high rate of return, which was awarded in the 1990s.  If FirstEnergy opened a new base rate case in MD, they would face losing at least a full percentage point of their return on all their capital and overhead, a pretty large sum of money.  Instead of asking for a base rate increase, which would jeopardize their old exorbitant rate of return, FirstEnergy is cutting back service on its meter readers to reduce their costs.

It’s beginning to look like the WV PSC is once again lagging behind neighboring states when it comes to policing the out of state electric companies that supply WV’s electricity.

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