PUCO orders FirstEnergy utilities pay $250 million penalty, issue customer refunds
COLUMBUS – Today the Public Utilities Commission of Ohio issued orders in its investigation in response to the criminal investigation brought by the U.S. Department of Justice surrounding the passage of Amended Substitute House Bill 6 during the 133rd General Assembly.
In two separate orders, the Commission found FirstEnergy’s Ohio utilities—Cleveland Electric Illuminating Company, Ohio Edison and Toledo Edison—violated Ohio law, PUCO regulations, PUCO orders, and ordered the utilities to pay a combined $250.70 million in restitution to customers and civil forfeitures.
“The Commission has remained steadfast in ensuring that we have followed the facts wherever they may lead,” stated PUCO Chair Jenifer French. “Our hope is the events underlying these proceedings will remain a cautionary lesson of accountability and honesty in utility regulatory matters.”
Restitution
The Commission found the utilities failed to demonstrate they adhered to a 2016 Commission order authorizing it to collect a “distribution modernization rider” for the sole purposes of supporting the utilities’ efforts to modernize their distribution grids. The Commission further found the utilities used money, collected from customers from 2017-2019, to subsidize its unregulated generation affiliate in violation of Ohio law.
The utilities are ordered to return to customers, over three billing cycles, $179.99 million. In determining the amount to be returned, the Commission found the utilities liable for treble damages applied to the $59.996 million spent by FirstEnergy in furtherance of HB 6, as identified by the US Attorney’s deferred prosecution agreement.
The utilities will refund an additional $6.64 million plus interest for certain transactions that it billed to customers but lacked supporting documentation or were misallocated to customers, as identified by a 2021 PUCO audit.
The utilities must file restitution calculations with the PUCO by Nov. 26, 2025 and begin issuing them in the following billing cycle.
Civil Forfeitures
The Commission found the utilities violated Ohio’s corporate separation laws when it entered into a consulting agreement with Sustainability Funding Alliance in 2013, in which regulated utilities were allocated costs for a consulting agreement to benefit the unregulated generation affiliate. The Commission ordered the utility to pay a civil forfeiture of $21.78 million.
The Commission found the utilities violated disclosure laws when it failed to produce a side agreement with Industrial Energy Users – Ohio during a 2015 PUCO proceeding. The Commission ordered the utility to pay a civil forfeiture of $18.93 million.
Finally, the Commission found the utilities in violation of seven areas identified by a PUCO 2021 corporate separation audit, citing the lack of separation between regulated and unregulated affiliates, the lack of a chief compliance officer, and missing information in a cost allocation manual. The Commission ordered the utility to pay a civil forfeiture of $23.36 million and be subject to a corporate separation audit in the next three years. In its findings the Commission observed “this pattern of violations contributed to the conduct giving rise to the HB 6 scandal.”
The Commission observed that the companies have demonstrated significant changes to instill commitment to ongoing oversight and transparency. While the Commission agrees the new leadership is focused on changing FirstEnergy’s culture, the Commission will remain vigilant to ensure this newfound motivation renders results.
“These proceedings were the first, and we trust the last, of their kind,” stated PUCO Chair Jenifer French. “It is our responsibility and duty to impose appropriate remedies so as to ensure that they are.”
Additional background information about the PUCO investigations, audits and timelines can be found at PUCO.ohio.gov/hb6.
Additional documents
PUCO commissioner statements
Summary chart
A copy of today’s opinion and orders is available on the PUCO website at PUCO.ohio.gov by clicking on the link to “Docketing Information System” and searching for cases 17-974-EL-UNC, 17-2474-EL-RDR, and 20-1629-EL-RDR.
The Public Utilities Commission of Ohio (PUCO) is the sole agency charged with regulating public utility service. The role of the PUCO is to assure all residential, business and industrial consumers have access to adequate, safe and reliable utility services at fair prices while facilitating an environment that provides competitive choices. Consumers with utility-related questions or concerns can call the PUCO Call Center at (800) 686-PUCO (7826) and speak with a representative.