PUC approves merger of West Penn, Penelec, more power companies

07 December 2023- The Pennsylvania Public Utility Commission (PUC) today approved a joint settlement that addresses all issues related to the proposed consolidation of four Pennsylvania electric utilities – Metropolitan Edison Company (Met-Ed), Pennsylvania Electric Company (Penelec), Pennsylvania Power Company (Penn Power), and West Penn Power Company (West Penn Power) – into the FirstEnergy Pennsylvania Electric Company (FE PA). 

The Commission voted 5-0 today to adopt the recommended decision issued by PUC Administrative Law Judges Conrad A. Johnson and Emily I. DeVoe, and approve a Joint Petition for Settlement of All Issues in this matter.

Merger Settlement Overview

Under the terms of the settlement approved today, FE PA will have five rate districts in Pennsylvania – the Met-Ed Rate District, Penelec Rate District, Penn Power Rate District, West Penn Power Rate District and the Pennsylvania State University Rate District (covering West Penn Power’s service to the university).  The current rate structure of Met-Ed, Penelec, Penn Power and West Penn Power will continue in each of those respective rate districts until a future rate case filing by FE PA. 

While FE PA has indicated that it intends to unify rates moving forward, the settlement includes a provision for gradual changes – requiring that any movement toward unification occur over a period covering three rate cases filed on or after Jan. 1, 2025, or ten years from the date of the Commission’s approval of the merger, whichever comes first.

Also, as part of the joint settlement, FE PA will track savings in operating expenses achieved as the result of this merger, and those savings will be flowed back to ratepayers in future rate cases.

Consumer Protections

The settlement also addresses a series of key consumer protection matters including continued staffing for universal service programs intended to assist at-risk consumers, for the duration of its pending Universal Service and Energy Conservation Plan, from 2024 through 2028; increasing the diversity and range of community voices included in the utility’s Universal Service Advisory Committee; making the transfer of enrollment in FE PA’s Pennsylvania Customer Assistance Program (PCAP) when consumers move from one FE PA rate district to another as seamless as possible; annual contributions of $150,000 to FE PA’s Hardship Fund for a period of three years, followed by annual contributions of $100,000 for the following two years; and a coordinated effort to encourage LIHEAP recipients to enroll in PCAP, recertify LIHEAP recipients in PCAP and identify LIHEAP recipients as eligible for winter shutoff protections.

Additionally, for a period of five years FE PA will maintain the location of a Pennsylvania call center and maintain services offered to residential customers by its call centers – including support during outages, planning for a move, answering billing questions, providing information about universal service programs and energy savings, and other current support services. 

FE PA will also provide monthly reviews of customer disputes and compliance findings by the PUC’s Bureau of Consumer Services – to identify trends and areas of performance improvement – and share those reports along with management responses with the Universal Service Advisory Committee on a quarterly basis.