FirstEnergy Should Not Be Approved As State Energy Broker: NOPEC

SOLON, OH — In a blistering statement, the Northeast Ohio Public Energy Council (NOPEC) said FirstEnergy Advisors should not be approved to be a statewide energy broker. The council said the Public Utilities Commission of Ohio was "rubber stamping" the deal.

Energy brokers advise customers on where they should get their power from and help them obtain the best possible deal on utilities. FirstEnergy Advisors is a newly created subsidiary of FirstEnergy Corporation.

"With well-established supplier relationships and solid regulatory and market expertise, FirstEnergy Advisors will help businesses identify the right products and services to meet their energy needs," a company spokesperson told Patch.

But NOPEC views the relationship between FirstEnergy Advisors and FirstEnergy Corporation as a conflict of interest. In fact, the council called the relationship "unlawful."

The application by FirstEnergy to become an energy broker, NOPEC said, is "unprecedented…because its [FirstEnergy Advisors'] provision of competitive electric services will be managed and controlled by the same senior executive management team that controls the provision of non-competitive electric distribution services."

NOPEC argues that FirstEnergy could use its massive marketing outreach to squash competition, by referring customers to FirstEnergy Advisors. The council warns that FirstEnergy Advisors could take advantage of FirstEnergy Corporation's electric distribution utility subsidiaries to crush competition in the energy market.

"In the long run, what we know in Ohio is when there is no competition, prices go up," said Chuck Keiper, NOPEC executive director. "We'll be moving back to a toxic environment where the utilities control the marketplace."

FirstEnergy Advisors argue they're a distinct business, separate from FirstEnergy Corp.

"FirstEnergy Advisors is a completely separate entity from the FirstEnergy utilities," a company spokesperson told Patch in an email. "We have worked with the Public Utilities Commission of Ohio staff to ensure FirstEnergy Advisors complies with all corporate separation rules."

The Public Utilities Commission of Ohio recently issued a two-paragraph review of FirstEnergy's application to become an energy broker. Staff recommended the company be approved. There was no public comment period held for the application.

"As required with PUCO rules, [FirstEnergy Advisors] filed an application on Jan. 17. Typically these are automatically approved after a short window," a PUCO spokesperson told Patch. "However, in this case several other organizations sought to intervene in the case and the PUCO staff requested more time to investigate. As such, the case now requires a vote from the five member commission on the company’s application."

While the commission still holds final approval, PUCO staff's initial recommendation to approve FirstEnergy Advisor's application drew the ire of NOPEC.

"NOPEC expected more from [PUCO] staff than a rubber stamp approval of a highly controversial application without requiring a hearing or comment procedure to allow public input into this key case affecting Ohio's deregulated electric market," NOPEC said in its filing with the PUCO responding to the staff recommendation.

NOPEC and the Ohio Consumers' Counsel have also asked the utilities commission to release all of its communications with FirstEnergy Advisors.

"We've been about competition since we began in 2001," Keiper said. "We're not afraid of another electricity broker coming into the market. In fact, we welcome it! But bring it on in a fair, honest, legal and transparent way. Let everyone see communications, if any, between FirstEnergy Advisors and the public body PUCO. Taxpayers and electricity consumers in Ohio are owed that, and a fully public process to investigate this application."