FirstEnergy Busted by FERC – Caught with Merger Costs in TrAIL FERC Accounts

Back in 2011, Keryn Newman busted FirstEnergy for illegally charging PJM rate payers for costs associated with the Allegheny Energy merger.

Her discovery finally bore fruit last Friday when FERC ordered FirstEnergy to pay us all back for its scam.

Here’s how Keryn describes it over at StopPATH WV:

This has been a long time in coming, but FirstEnergy was ordered on Friday to “submit a detailed plan for implementing audit staff’s recommendations and correcting journal entries reflecting an approximate $1.2 million refund to affected customers from its transmission-only subsidiaries with formula rate recovery mechanisms, including Trans-Allegheny Interstate Line Company, Potomac-Appalachian Transmission Highline, LLC, and American Transmission System, Incorporated.”

The first time this problem reared its ugly head was during the July 2011 PATH Open Meeting to review its 2010 actual transmission revenue requirement.  At this phone “meeting” I notified PATH that I had found expenses of the Allegheny Energy/FirstEnergy merger in its PATH rates.

In September, FirstEnergy subsidiaries PATH and TrAILCo made entries to their quarterly FERC financial filings to effect a credit for amounts wrongly charged to ratepayers in violation of the company’s “hold harmless” guarantee to the Commission that it would not charge merger expenses to ratepayers except under certain circumstances.  Over a million dollars was credited, but because PATH and TrAILCo made the correction in the normal course of business, it did not credit ratepayers for interest on the amounts wrongly recovered.

So all of us PJM rate payers owe Keryn and Ali a big thank you for their hard work fighting FirstEnergy’s scams at FERC.

3 thoughts on “FirstEnergy Busted by FERC – Caught with Merger Costs in TrAIL FERC Accounts

  1. To be clear, FERC’s audit deals with merger labor costs (the expenses were already removed through the series of corrections I describe). FirstEnergy boldly included merger labor not only in expense accounts, but also in capital accounts that earned 12.4% interest, after promising FERC it would not do so. I never bothered to try to track labor costs, had enough to do with expenses. There is still a separate TrAILCo audit in process. Nice to know some regulators have our backs, isn’t it? Too bad the WV PSC can’t be bothered to protect us.

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