My industrial clients in Dayton are getting hammered by FirstEnergy's Transmission Cost Recovery Rider jumping from $0.0234/kWh to $0.0467/kWh starting January 2018. That's literally doubling transmission costs overnight. They claim it's for grid modernization projects but I'm seeing the same charges applied to customers who already have smart grid infrastructure. Anyone else dealing with FirstEnergy on this? The rider is supposed to recover actual transmission investment, not pad their profits. Looking at challenging this through PUCO.
FirstEnergy transmission rider doubling - anyone fighting this?
Kevin, I'm seeing the exact same issue with Cincinnati customers served by Duke Energy Ohio. Their transmission rider went from 2.1 cents to 4.3 cents per kWh in January. Duke claims it's for PJM transmission upgrades but the math doesn't add up. I filed a formal complaint with PUCO last month demanding itemized justification for every project included in the rider calculation. These utilities are using transmission riders as cash cows.
Both of you are spot on - this is happening across Ohio. AEP's Transmission Cost Recovery Rider here in Columbus jumped 85% this year. The problem is PUCO rubber-stamps these rider increases without proper scrutiny. I've had success demanding the transmission owner annual reports that show actual capital expenditures versus projected costs. Often there's a huge disconnect between what they're collecting and what they're actually spending.
Similar issues here in Alabama with Alabama Power's Transmission Delivery Charge. What really burns me is they're charging for transmission infrastructure that benefits the entire grid, not just local customers. Kevin, have you looked at whether FirstEnergy is allocating costs properly between their distribution and transmission functions? I caught Alabama Power double-charging for substation equipment last year.
Y'all need to check the FERC transmission planning documents. Here in Louisiana, Entergy was including speculative future projects in their rider calculations before FERC even approved the need. The transmission owners are supposed to file detailed cost projections annually but they often pad the numbers knowing most customers won't challenge them. I recovered $12,000 for one client by proving Entergy was over-collecting for cancelled projects.
Brenda makes a great point about cancelled projects. I'm finding FirstEnergy is still collecting for transmission upgrades that got shelved two years ago. PUCO is supposed to do annual reconciliations but they're way behind. Filed a discovery request for all transmission projects included in the 2018 rider calculation. If they can't justify every line item, we should get refunds. This affects every commercial and industrial customer in their territory.
Update on my Duke Energy complaint - PUCO ruled in our favor on three transmission projects totaling $8.4 million that Duke couldn't justify. Getting refund credits starting next month. The key was proving Duke allocated costs to Ohio customers for transmission upgrades that primarily benefited Kentucky operations. These utilities think they can hide behind complex allocation formulas but the math has to add up.
Cecilia, that's a huge win! Cross-state allocation issues are rampant with these transmission riders. I'm dealing with AEP trying to charge Ohio customers for West Virginia transmission projects. The FERC cost allocation methodologies are complex but if you dig into the details, the utilities often get sloppy with their calculations. Kevin, you should definitely look at interstate allocation in your FirstEnergy case.
Eugene's right about interstate allocation. Found FirstEnergy charging Ohio customers for Pennsylvania transmission upgrades under their Regional Transmission Expansion Plan. PUCO staff finally agreed to audit the rider calculation after I provided detailed analysis showing $3.2 million in misallocated costs. Sometimes you have to do their job for them, but it pays off when you recover real money for clients.
This thread is gold! I'm dealing with similar transmission rider issues in Wisconsin with WEC Energy Group. They've been including American Transmission Company charges that should be allocated differently across their service territory. Kevin and Cecilia, would you mind sharing your PUCO complaint templates? I think the approach you used could work for Wisconsin PSC filings too.
Paul, I'll send you my complaint template offline. The key is demanding granular project-level data and cost allocation workpapers. These transmission riders are cash cows for utilities because most customers don't understand the complex regulations. But if you're willing to dig into FERF filings and state tariffs, there's usually money to be recovered.
Thanks Cecilia! One more thing I've noticed - utilities are using transmission riders to recover costs that should be in base rates. Wisconsin Electric is charging for routine maintenance and replacements through their rider instead of including it in rate cases where it would get proper regulatory scrutiny. It's creative accounting that shifts costs from shareholders to ratepayers.