HARRISBURG — The Pennsylvania Public Utility Commission (PUC) approved a joint settlement significantly reducing FirstEnergy Pennsylvania Electric Co.’s (FirstEnergy) proposed rate changes by more than 55%, while also securing commitments for infrastructure upgrades and customer assistance program enhancements.
FirstEnergy serves approximately 2.1 million customers in 56 counties across Pennsylvania through its Met-Ed, Penelec, Penn Power and West Penn Power rate districts.
The commission voted 5-0 to approve the settlement, which limits the overall change in base rates to approximately $225 million annually – a sharp reduction from the utility’s initial request of approximately $502 million per year.
The settlement was supported by numerous stakeholders, including the Pennsylvania Office of Consumer Advocate, the Office of Small Business Advocate, the PUC’s independent Bureau of Investigation & Enforcement, the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania (CAUSE-PA), large industrial customer groups, labor unions, Walmart Inc., Pennsylvania State University and FirstEnergy Pennsylvania.
Under the agreement, the average residential customer using 1,000 kWh per month will see bill changes ranging from:
9% for Met-Ed rate district customers,
1% for Penelec rate district customers,
5% for Penn Power rate district customers, and
2% for West Penn Power rate district customers.
Enhanced customer assistance and reliability initiatives
The settlement includes provisions to streamline and enhance FirstEnergy’s customer assistance programs:
Simplifying enrollment: FirstEnergy will use data from federal Low Income Home Energy Assistance Program (LIHEAP) applications to ease enrollment and retention in its customer assistance programs, reducing paperwork and administrative costs.
Automatic enrollment: Within six months, FirstEnergy will seek approval to automatically enroll LIHEAP recipients not already participating in its customer assistance programs.
Other customer assistance measures include:
Increased Hardship Fund support: $2 million in additional annual shareholder contributions for the next three years, plus $500,000 in additional annual shareholder matching funds for grant assistance.
Expanded LIURP funding: The annual budget for the Low Income Usage Reduction Program (LIURP) will increase proportionally to the residential base distribution rate hike.
Reliability and service commitments
FirstEnergy will implement initiatives to improve system reliability and customer service:
Reliability improvements: Commitments to reduce the average frequency and duration of service outages.
Undergrounding projects: By Dec. 31, 2025, FirstEnergy will assess opportunities to place certain facilities underground in areas where it would most improve reliability. This will lead to proposed updates to its Long-Term Infrastructure Improvement Plan.
Performance audits: Annual reviews of call center operations, billing, meter reading, and response to customer complaints to ensure compliance with Pennsylvania regulations and identify complaint trends.
Refund of improper lobbying charges and “Stay Out” terms
As part of the settlement, FirstEnergy will refund $13.6 million, plus interest, to customers for improperly allocated lobbying expenses. This refund will be issued as a one-time bill credit within 30 days of the settlement’s final approval.
FirstEnergy also agrees to not seek any further changes in base distribution rates for any of its Pennsylvania rate districts for at least two years – until Jan. 1, 2027, at the earliest, absent any fundamental changes in regulatory policies or federal tax policies.
The new rates will be effective on or after Jan. 1.
