The following is a news release from the Northeast Ohio Public Energy Council (NOPEC) concerning the application of Suvon, LLC d/b/a FirstEnergy Advisors and FirstEnergy Home for an electric broker/aggregator license to serve all customer classes in all service areas.

As first reported by EnergyChoiceMatters.com on April 8, Staff of the Public Utilities Commission of Ohio have recommended that the Commission approve the application.

NOPEC opposes this recommendation. As previously reported, various stakeholders including NOPEC, the OCC, retail suppliers, and brokers have raised various concerns with FirstEnergy Advisors' application, with NOPEC and OCC alleging that the commonality of management and control among FirstEnergy Advisors, and the FirstEnergy Ohio distribution utilities, "is a per se violation of R.C. 4928.17(A), which requires that a competitive retail electric supplier be 'fully separated' from its regulated utilities" (story here). Retail suppliers have also objected to FirstEnergy Advisors' use of the FirstEnergy brand name

FirstEnergy Advisors has said that its structure and name comply with applicable corporate separation rules and statutes (see story here)

In addition to the news release below, NOPEC filed with PUCO a response to the Staff recommendation (see the response here)

In the newly filed response, NOPEC provided two examples of how the shared management and control structure proposed under the FirstEnergy Advisors application could, in NOPEC's words, "present[] clear opportunities for abuses of the corporate separation rules."

NOPEC alleged that, "limiting distribution and transmission information to sales employees makes no difference when the persons controlling FirstEnergy Advisors possess insider knowledge of the EDUs’ operations and the prohibited information."

NOPEC's filing included the following examples, as stated by NOPEC:

"1. Consider a developer who approaches one of the EDUs about a new project – a major manufacturing facility or a new subdivision of homes – and needs to arrange for regulated transmission or distribution services. Certainly, some or all of the following EDU executives will know of the proposed major development: Chuck Jones, President of FirstEnergy Utilities and a director of each of the EDUs; Steve Strah, Senior Vice President/CFO of FirstEnergy Corp and a director of each of the EDUs; and Dennis Chack, President of FirstEnergy Ohio Utilities. Conveniently, all three EDU officers also are the managers who control FirstEnergy Advisors, and Mr. Chack is its President. While learning of the proposed EDU development, they simultaneously will learn of the opportunity for their non-regulated affiliate, FirstEnergy Advisors, to make a brokerage fee by arranging for the development’s power supply, before any other nonaffiliated CRES provider in Ohio has knowledge."

"2. Consider an EDU employee or officer who meets with an elected official of a community in the EDU’s service territories in a government relations context. The community has an existing or is considering a new governmental aggregation program in its community. What in this supplemental FirstEnergy Advisors’ filing prevents the EDU employee or officer from suggesting to the elected official that he or she contact a FirstEnergy Advisors employee or officer who can provide aggregation service to the community, or even introduce them? Or to walk down the hallway at the same 76 South Main Street, Akron offices the EDUs and FirstEnergy Advisors are sharing and mention the business opportunity to the FirstEnergy Advisors’ employee or officer since that represents a potential fee for FirstEnergy Advisors? This is not a legally separated EDU affiliate because it cannot be if the same people are running both companies with the same profit motive."

NOPEC's news release is below. RetailEnergyX.com disclaims any responsibility for the content, data, characterizations or allegations contained in the release below, and makes no averment as to its accuracy or statements. Publication of the news release is not necessarily an endorsement

News Release:

NOPEC Requests Rejection of PUCO Staff's 'Rubber Stamp' Approval of FirstEnergy Affiliate Deal

Ohio Consumers' Counsel, Others Join in Call for Hearing, Public Records

SOLON, Ohio, April 15, 2020 -- The Northeast Ohio Public Energy Council (NOPEC) called on the Public Utilities Commission of Ohio (PUCO) to reject its staff's recommendation that FirstEnergy Advisors be approved to be a statewide energy broker and aggregator. (Link to complete filing here: https://www.nopec.org/media/1905/nopec-response-to-puco-filed-04-14-2020.pdf)

Additionally, NOPEC and the Ohio Consumers' Counsel (OCC) in separate requests asked the PUCO to release public records of any communications with FirstEnergy Advisors. (Link to complete filing here: https://www.nopec.org/media/1904/nopec-public-records-request-filed-04-13-2020.pdf)

NOPEC, Ohio's largest nonprofit energy aggregator, and the OCC, along with six other statewide energy companies and organizations that promote or provide competitive electric services, have filed in the case to oppose or express serious concern about FirstEnergy Advisors' application.

FirstEnergy Advisors is a new subsidiary set up by investor-owned utility giant FirstEnergy Corp. Its offices are in the same building as the FirstEnergy utility headquarters in Akron. Opponents view this application as a conflict of interest.

NOPEC, in one filing with the PUCO, called the application both unlawful and "unprecedented…because its [FirstEnergy Advisors'] provision of competitive electric services will be managed and controlled by the same senior executive management team that controls the provision of non-competitive electric distribution services." In its latest filing, NOPEC called the FirstEnergy Advisors' management and control structure "a textbook classic example of market power abuse."

In other words, while FirstEnergy Advisors (FEA) says it would work with electric customers to get them the best deal by fielding competitive bids from various suppliers, the opportunity and temptation to take advantage of the parent company's electric distribution utility subsidiaries' network, and use of the FirstEnergy name in a competitive setting, represents too great a threat to consumers and Ohio's competitive retail electric market. And FirstEnergy, with its massive marketing reach, could squash competition in several ways, including referring its utility customers to FirstEnergy Advisors. FirstEnergy also could benefit from referring FEA customers to its former generation subsidiary, Energy Harbor (formerly known as FirstEnergy Solutions).

"In the long run, what we know in Ohio is when there is no competition, prices go up," said Chuck Keiper, NOPEC Executive Director. "We'll be moving back to a toxic environment where the utilities control the marketplace."

According to jointly published Ohio State University/Cleveland State University studies in 2016 and 2019, electric deregulation in the state – allowing consumers to choose their electricity supplier - has saved Ohio consumers nearly $24 billion since 2011.

Despite pages of filings from all of the opponents outlining why the proposed application is illegal and anti-competitive, and requests for a hearing, the PUCO staff recently sent the Commissioners a two-paragraph "review" and recommendation that FirstEnergy Advisors' certificate be approved by the commission without a hearing or opportunity for public input.

"NOPEC expected more from Staff than a rubber stamp approval of a highly controversial application without requiring a hearing or comment procedure to allow public input into this key case affecting Ohio's deregulated electric market," NOPEC said in its filing with the PUCO responding to the staff recommendation.

The PUCO should reject the staff recommendation and either deny FirstEnergy Advisors' application or order a hearing that would bring the matter into the public light, NOPEC said.

That staff approval recommendation also came despite FirstEnergy Advisors' refusal to respond to any discovery requests for information about the application made by NOPEC, the OCC and other opponents.

"It comes down to a simple question: What are they hiding?" Keiper said. "In fact, FirstEnergy Advisors is so intent on hiding its relationship with FirstEnergy Corp.'s Ohio electric distribution utilities that it asked the PUCO to order a blanket ban on all discovery as a condition of the application proceeding."

Further, Keiper said, the staff report "lacks transparency, due process and the type of detailed review that is called for in this contested proceeding with eight other intervenors agreeing the application should not be approved."

The concern that electricity consumers across much of the state could be hurt by a deal made behind closed doors without a hearing or an opportunity for the intervenors or the public to participate prompted the public records request, Keiper said.

"We've been about competition since we began in 2001," Keiper said. "We're not afraid of another electricity broker coming into the market. In fact, we welcome it! But bring it on in a fair, honest, legal and transparent way. Let everyone see communications, if any, between FirstEnergy Advisors and the public body PUCO. Taxpayers and electricity consumers in Ohio are owed that, and a fully public process to investigate this application."

ABOUT NOPEC

NOPEC (Northeast Ohio Public Energy Council) is a nonprofit group of over 235 communities in 19 Ohio counties that negotiates lower utility rates for its members. As Ohio's largest governmental retail energy aggregator, NOPEC buys gas and electricity in bulk to help lower customers' utility bills. Since 2001, NOPEC has saved residents and businesses hundreds of millions of dollars on their energy costs and awarded more than $28 million in energy-efficiency grants to NOPEC member communities. For more information about NOPEC, visit www.nopec.org.

Tags:
Ohio   FirstEnergy   NOPEC   FirstEnergy Advisors   FirstEnergy Home  

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