FirstEnergy’s push into the power broker/aggregator market draws opposition in Ohio and Pennsylvania
FirstEnergy’s attempt to become a competitive electric power broker/aggregator has drawn opposition in Ohio and Pennsylvania due to the potential broker’s close ties to regulated utility subsidiaries of FirstEnergy Corp.
In Ohio, Suvon, LLC’s (d/b/a FirstEnergy Advisors) potential certification as power broker/aggregator drew significant opposition from governmental aggregators, residential consumers counsel and other competitive retail electric service providers. In re Suvon, LLC d/b/a FirstEnergy Advisors, PUCO Case No. 20-103-EL-AGG. Parties opposing FirstEnergy Advisors’ Ohio certification argued two key issues:
- FirstEnergy Advisors’ very close relationship with FirstEnergy Corp.’s regulated electric distribution utilities would result in unlawful and anti-competitive subsidies.
- The use of the name “FirstEnergy” by FirstEnergy Advisors would lead to unfair competitions and customer confusion because of customers’ relationship and recognition of the “FirstEnergy” regulated utility brand.
Despite opposition of various parties, the Public Utilities Commission of Ohio (PUCO) ultimately granted FirstEnergy Advisors’ application and rejected the oppositions’ arguments. See FirstEnergy Advisors, PUCO Case No. 20-103-EL-AGG, Finding & Order (April 22, 2020).
Opposition to FirstEnergy’s foray into the competitive power broker/aggregator business has also been brewing in Pennsylvania. On August 4, 2020, the Retail Energy Supply Association (RESA) filed a protest with the Pennsylvania Public Utility Commission (PUC or Commission) opposing FirstEnergy Advisors’ application for an electric broker/marketer license. In re Suvon, LLC d/b/a FirstEnergy Advisors, Docket No. A-2020-3020377. RESA objected to FirstEnergy Advisors’ close business and structural relationship to FirstEnergy Corp. FirstEnergy Corp. is the parent company of various regulated electric distribution utilities within Pennsylvania.
Similar to opposition presented in FirstEnergy Advisors’ PUCO case, RESA raised concerns in the Pennsylvania case regarding the technical fitness of FirstEnergy Advisors to operate in compliance with the Commission’s regulations. RESA alleged that "FirstEnergy Advisors lacks technical fitness because its Application lacks the requisite details on how it intends to ensure compliance with the Commissions regulations. In particular, given the relationship, closeness, shared facilities, and shared workers that FirstEnergy Advisors and FirstEnergy Corporation.” Protest Nunc Pro Tunc of RESA to FirstEnergy Advisors’ Application (“RESA Protest”) at pg. 4.
RESA argued that FirstEnergy Advisors failed to demonstrate that it could operate independently from FirstEnergy Corp. in order to comply with the Commission’s consumer protections and competitive market safeguards. RESA also argued that FirstEnergy Corp.’s regulated ratepayers might be subsidizing FirstEnergy Advisors through shared services between the entities. Pointing out a number of potential cross-subsidies, RESA stated, “FirstEnergy Advisors potentially shares offices, employees, and administrative resources with FirstEnergy Corp.” Id.
In addition, RESA argued that FirstEnergy Advisors failed to demonstrate how it would eliminate or alleviate customer confusion regarding the difference between the unregulated FirstEnergy Advisors and the regulated FirstEnergy Corp. electric distribution utilities. Because of customers’ preexisting affiliation with the “FirstEnergy” name, RESA argued that FirstEnergy Advisors would have a competitive advantage over other power brokers/aggregators that are not affiliated with FirstEnergy Corp.
Separation between regulated electric distribution utilities and their unregulated affiliates has been a concern since the beginning of electric generation service deregulation/restructuring. It remains to be seen whether parties will succeed in their fight against FirstEnergy’s push to be a player in Ohio’s and Pennsylvania’s competitive power broker/aggregation markets.