Fixed-rate electric customers to be hit with polar vortex fee - abc27 WHTM

Fixed-rate electric customers to be hit with polar vortex fee

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The Public Utility Commission is expecting complaint calls to come any day.

In fact, it gave employees a PowerPoint presentation on how to handle the angry callers on Wednesday.

The fallout is related to mailers sent out by First Energy Solutions notifying customers with fixed-rate contracts that it will be charging a one-time fee of $5 to $15 to offset costs incurred when energy prices spiked in frigid January.

First Energy Solutions, based in Akron, Ohio, has nearly 600,000 Pennsylvania customers and nearly 400,000 of them are on fixed-rate deals.

It's the first, likely not the last, attempt by a company to recoup losses from fixed-rate customers.

Variable-rate customers were zinged in recent weeks with bills that were two, three, even four-times higher than normal.

Apparently, there's fine print in First Energy's older, fixed-rate contracts that allows it to collect the fee.

"We started seeing some of these clauses in some of these fixed-rate contracts and that meant that fixed didn't really mean fixed," PUC spokeswoman Jennifer Kocher said.

The PUC ordered the elimination of those clauses in November 2013, but customers who signed a fixed-rate deal with First Energy Solutions prior may be on the hook for the extra cash.

First Energy spokeswoman Diane Francis confirmed that the mailers have been sent out and said the company purchases power on the wholesale market, PJM, and was stunned by its electric bill and needed to recoup some of the costs.

"I can't tell you the exact dollar amount, but our bill from PJM in January 2014 was higher than all of 2013. Because of unprecedented events we feel it's fair to pass on an extra $5 to $15 dollar fee," Francis said.

abc27 informed Rep. Bob Godshall (R-Montgomery) after a Consumer Affairs Committee meeting Thursday afternoon of First Energy's efforts to defray costs by charging fixed-rate customers. Godshall is the chairman.

"I'm going to be looking at that one," Godshall said. "I hadn't heard that one before and I will look closely at that and they wouldn't be able to do that without the PUC saying OK."

Kocher says if there's fine print in those earlier contracts allowing First Energy to collect the money, there's nothing the PUC can legally do to stop it.

But Representative Rob Kauffman (R-Franklin) says Pennsylvanians are already suspicious of energy suppliers and tacking on surcharges won't sit well with lawmakers.

"We don't want too many legislative remedies out there, but I think there will be more legislative remedies to come if the power companies continue to try to work over the customers of Pennsylvania," he said.

As for the PUC, it will take names and numbers of customers getting hit with the one-time fee even if it cannot legally intervene.

Godshall says even an extra $15 is complaint worthy.

"Customers have a right to know that they have a fixed rate," he said. "A fixed rate is a fixed rate, period."

Except, apparently, when it isn't. Customers may be wondering why a company is trying to recoup money when it loses but doesn't offer rebates when profits are flowing?

Francis insists that isn't happening.

"The way the power market is right now, companies are charging very close to what it takes to actually generate the power," she said. "There are no huge margins in the electric industry which is why we feel the need to pass on the cost."

First Energy Solutions customers should be getting the surcharge notifications in the mail in the next few days. The company will add the one-time fee to bills between May and July.


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