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PUCO Orders New Audit Of FirstEnergy Utilities' Compliance With Corporate Separation Regulations

November 05,2020



The Public Utilities Commission Of Ohio directed Staff to issue an RFP for audit services to conduct an additional corporate separation audit of the FirstEnergy Ohio electric distribution companies ("Companies") which includes examination of the time period leading up to the passage of Am. Sub. H.B. 6 and the subsequent referendum.

"The Commission believes that the information supplied by FirstEnergy Corp. in [a recent] Form 8-K requires that we take additional action to ensure compliance by the Companies and their affiliates with the corporate separation provisions of R.C. 4928.17 and with the Companies’ Commission-approved corporate separation plans," PUCO said

PUCO noted that, as previously reported, "On October 29, 2020, FirstEnergy Corp., the corporate parent of the Companies, filed a Form 8-K with the United States Securities and Exchange Commission reporting the termination of certain officers and appointment of a new interim chief executive officer. The Form 8-K further stated that, during the course of FirstEnergy Corp.’s internal investigation related to ongoing government investigations, the Independent Review Committee of the Board of Directors determined that each of the terminated executives violated certain FirstEnergy Corp. policies and its code of conduct."

"While the Commission is aware of reports containing allegations against FirstEnergy Corp. regarding its conduct in the passage of Am. Sub. H.B. 6 and the subsequent referendum, we are determined to act in a deliberate manner, based upon facts rather than speculation, and with due consideration to the limits on our statutory authority over FirstEnergy Corp. and over the political and charitable activity of all public utilities in this state. Nonetheless, we believe that the information supplied by FirstEnergy Corp. in the Form 8-K requires that we take additional action to ensure compliance by the Companies and its affiliates with the corporate separation provisions of R.C. 4928.17 and with the Companies’ Commission-approved corporate separation plans. Therefore, the Commission directs the Staff to issue the attached RFP for audit services to conduct an additional corporate separation audit for the period between November 1, 2016 and October 31, 2020, which includes examination of the time period leading up to the passage of Am. Sub. H.B. 6 and the subsequent referendum," PUCO said

While PUCO's actions here were prompted by certain events and disclosures related to HB 6, the additional audit is being conducted in the existing, pending proceeding addressing a prior audit of the FirstEnergy Ohio utilities' corporate separation plan, Case No. 17-974-EL-UNC

As exclusively first reported by EnergyChoiceMatters.com in May 2018, in the pending case, an audit report from a consultant retained by PUCO had recommended that, if FirstEnergy Solutions continued as a retail supplier in Ohio, the name "FirstEnergy" should be removed from the competitive supplier's name. PUCO has not yet addressed the audit report or recommendations from the consultant. While FirstEnergy no longer operates a retail supplier nor does it use the name FirstEnergy Solutions, FirstEnergy has created a new broker which uses the name FirstEnergy Advisors

See a full discussion of the consultant report here

Tags:
FirstEnergy   FirstEnergy Ohio   Ohio  

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