By: Charlotte R. Lane, Chairman
West Virginia Ratepayers Are Not Paying for the Ohio Bribery Scandal
You may have heard about the FirstEnergy bribery scandal in Ohio.
Federal prosecutors have accused the former speaker of the Ohio House of Representatives of leading a FirstEnergy supported effort to pass a billion dollar bailout of its nuclear plants.
As chairman of the Public Service Commission of West Virginia, I want to assure you that expenses related to FirstEnergy’s illegal lobbying activities in Ohio or anywhere else have not been passed on to Monongahela Power (Mon Power) or Potomac Edison’s (PE) West Virginia customers.
I am closely monitoring the Ohio, Maryland, New Jersey and Pennsylvania investigations.
The commission requires electric utilities to follow specific accounting rules that require that lobbying activities and image building advertising be recorded in accounts that are not included in expenses that are recoverable in rates.
Compliance with accounting rules is subject to multiple controls, including internal auditing, independent external auditing, Federal Energy Regulatory Commission reporting and reviews, Security and Exchange Commission reporting and verification requirements, PSC staff verification and reviews by other parties during rate cases.
If an expense on a utility’s books relates to illegal activities it would, of course, be excluded from rate recovery, without question.
But, just as importantly, ratepayers should be aware that expenses related to lobbying for passage of legislation or image building activities are never allowed for ratemaking, even if they did not represent illegal activities.
Furthermore, as Mon Power and PE have not had a base rate case in West Virginia since 2014 there has been no opportunity for the utility to even attempt to pass on those questionable payments for legislative lobbying.
Any reports to the contrary are unsupported speculation, or even worse, knowingly misleading and false.
It is noteworthy that Ohio, Maryland, Pennsylvania and New Jersey, the states that have identified disallowed expenses, have all recently completed base rate cases for FirstEnergy. In those states, FirstEnergy had requested recovery in rates for those impermissible expenses.
Mon Power and PE are expected to file a base rate case here later this year.
West Virginia ratepayers have my word, we will closely scrutinize all expenses to make sure that expenses for illegal activities as well as expenses for legislative lobbying and image enhancement, either directly incurred or indirectly incurred through affiliated inter-corporate charges, are not passed on to you.