Legislators from Valley get charged up over electric rate hikes
Several state legislators who represent the Mahoning Valley say they are outraged and angered that those who buy their electricity directly from FirstEnergy are seeing their bills double, but all they can offer is the advice to change providers.
“This is horrible,” said state Sen. Michael Rulli, R-Salem, who represents Mahoning and Columbiana counties. “This is the worst possible timing with the hot weather and people having to use air conditioning.”
Starting last Thursday, FirstEnergy default customers — those who purchase electricity directly from the company and not another retail supplier — saw their electricity rates skyrocket.
FirstEnergy companies include Ohio Edison, which services the Mahoning Valley, as well as Toledo Edison and the Illuminating Co.
Ohio Edison customers were paying 5.8 cents per kilowatt hour as of Wednesday. It jumped to 12.39 cents per kWh the next day. For Toledo Edison customers, it went from 5.9 cents per kWh to 12.41 cents. For Illuminating Co. customers, it went from 5.9 cents per kWh to 12.40 cents.
An average FirstEnergy customer uses about 750 kWh per month, according to the company.
The rates will last through May 2024 and affect only customers on FirstEnergy’s standard service offer.
State Rep. Lauren McNally, D-Youngstown, is an Ohio Edison default customer and said she was stunned to read in last week’s newspaper about the increase.
“I thought, ‘How can I pay my electric bill?'” she said. “I’m not going to use my air conditioner and we’re going to suffer. It’s scary to me. We’re coming up on summer, and we’ve had extremely hot summers the last three years and a lot of power outages. The cost of everything is up. Food is up. Gas is up. It’s one more expense.”
She added: “How can I afford my electricity this summer? I can’t absorb it into my bills. If I can’t afford it, plenty of people can’t afford it.”
FirstEnergy said the increase is needed because it had to pay more to purchase wholesale electricity through competitive auctions and the electricity is provided “at cost” to customers.
Even so, a number of legislators blamed the price increase on FirstEnergy’s involvement in the state corruption scandal in which Larry Householder, the former speaker of the Ohio House, and others were found guilty of getting $60 million in bribes from the company for a $1.1 billion bailout of two failing nuclear power plants owed by a subsidiary of FirstEnergy.
FirstEnergy admitted July 22, 2021, that it conspired to commit honest services wire fraud, agreed to pay a $230 million penalty for its involvement in the scandal and signed a deferred prosecution agreement that could result in dismissal of the charge.
“Ohioans deserve better than utility companies who double our electric rates after orchestrating a massive bribery scheme to get a bailout,” said state Rep. Nick Santucci, R-Howland.
“Ohioans’ utility bills are being decimated by a crooked company,” Rulli said. “I’m 1 million percent against this. I’ll do what I can to reverse this, but I don’t know what the Legislature can do.”
When FirstEnergy participated in the power auctions in the spring and fall of 2022, natural gas prices were very high, but they have since dropped.
The Public Utilities Commission of Ohio, which approved auctions for FirstEnergy in 2016 as part of an eight-year plan, oversees the auctions “to ensure the bidding process was open, transparent and adhered to procedural guidelines — basically confirming it was a fair auction,” said Matt Schilling, PUCO spokesman.
FirstEnergy has filed an application to establish a new electric purchasing plan for the period between June 2024 and May 2032 that proposes to use the same competitive bidding auctions, he said.
“It’s unbelievably bad to me that average everyday Ohioans are clearly paying for the FirstEnergy scandal,” McNally said. “FirstEnergy asks us to eat other costs such as building a new substation in Youngstown and paying for the bad service we receive from them. We need to have a conversation about what FirstEnergy has done in Ohio, which is a mess.”
State Rep. Al Cutrona, R-Canfield, said other power companies also are seeing rate increases for the same reasons.
“The Legislature can’t tweak or change it,” he said. “It’s the law of supply and demand. Folks naturally are frustrated with this. Any time you have an increase, people are upset. People are going to be even more upset in July when they get their energy bill. It’s double the cost.”
Cutrona said much of the problem is because the country doesn’t have a “diversified energy policy” with the President Joe Biden administration targeting the coal industry, which drives up energy costs.
“It’s not a FirstEnergy issue, it’s an energy issue in general,” he said. “There’s a trust issue with FirstEnergy, but we’re seeing it with AEP and most energy providers. The best way to handle this situation is to be energy independent and to diversify the energy portfolio utilizing coal, nuclear and oil and gas.”
AEP Ohio’s rate went from 7.4 cents per kWh Wednesday to 11.8 cents the next day. Duke Energy Ohio went from 6.4 cents to 10.1 cents. Along with FirstEnergy, they are the largest electric companies in Ohio.
Cutrona said there are “massive concerns with a hot summer that we’ll see brownouts and blackouts due to the amount of usage. People on fixed income who are dealing with rising inflation are not expecting an extra $100 or $200 on an electric bill. They can’t afford it.”
Cutrona said consumers should look at offers from retail suppliers on energychoice.ohio.gov, the state’s Apples to Apples comparison chart, to evaluate prices on residential electricity.
Santucci said: “FirstEnergy’s massive electric rate hike hurts working families across Ohio who have been hurt by inflation. Ohioans have the ability to shop with different providers for a better electric rate, and I encourage Trumbull County residents to do so.”
McNally said she will be shopping for a new electric supplier.
“It’s in the 90s, and I’m not turning my air on because of the increase,” she said.
FirstEnergy electric bills are divided into delivery and supply. FirstEnergy is responsible for delivering electricity. Customers can choose a supplier though FirstEnergy becomes the default supplier if one is not selected.
This started in July 1999 with the state deregulating energy markets.
“Republicans love deregulation, but they don’t think of the consumer,” McNally said. “By deregulating, are we protecting the consumer or are we hurting them? In this case, we absolutely hurt the consumer. Are we in it for profit over people or people over profit? We need to get back to people over everything.”
Cutrona said some of the issues result from state deregulation, “but a lot of this stuff was purchased years out. The big change is what does the federal level do to try to allow for the diversification of energy and being energy independent?”