FirstEnergy Overpaid by Millions for Renewable Energy Compliance

Audits show that utility FirstEnergy spent millions of dollars more than it should have to comply with Ohio’s renewable-energy mandates, and passed the cost on to consumers, The Plain Dealer reports.

The state law mandates a percentage of the power every electric company sells to be generated from renewable sources. As an alternative, it allows companies to buy renewable energy credits (RECs) instead of the power itself, or pay the state an alternative compliance payment.

According to the Cleveland-based newspaper, audits found that Illuminating Co., Ohio Edison and Toledo Edison relied on FirstEnergy, an unregulated affiliate, to buy RECs, and FirstEnergy paid as much as 15 times more for the credits than the local companies would have spent on fines paid to the state.

The Public Utilities Commission of Ohio allowed these costs be passed on to customers, with a 7 percent interest charge, over the next three years. The extra costs will equal about $5 per customer per month.

A 2011 study from investor advocacy group Ceres found Ohio Edison ranked the lowest in spending on energy efficiency programs in 2009. Out of the 50 utilities benchmarked, Ohio Edison spent $0.02 per MWh. Pacific Gas & Electric had the highest relative spending at $4.80 — 240 times the level of Ohio Edison.

Campbell Soup Company along with FirstEnergy and others in June completed the installation of a 9.8 MW solar power system at Campbell’s manufacturing facility in Napoleon, Ohio. The system, for which a power purchase agreement was signed in 2011, now generates the equivalent of 15 percent of the facility’s annual electricity requirements.

Ohio led the county in wind energy production in the second quarter of 2012, according to the American Wind Energy Association, helping the US to reach a milestone of 50 GW of wind energy capacity installed.