Monthly meter reading will increase customer rates an additional $7.5 million annually, or 1.35% for residential customers(1.57% for non-residential). This increase will be added to the already proposed 13.95% base rate increase, and additional estimated increase for coal plant retrofits of another 2%. Total rate increase proposed by FirstEnergy for its West Virginia residential customers?
According to Testimony of Raymond E. Valdes filed last week, FirstEnergy's 2013 cost of meter reading was just over $5M per year. Dividing that number by the number of actual meter reads performed resulted in an average cost of $1.99 per meter read. But FirstEnergy can't simply double the costs because its number of meter reads compared to estimates is not equal, even when the annual read customers are removed from the equation. When numbers are actually put on paper, it turns out that FirstEnergy was not actually reading meters every other month, or half the time, as required. FirstEnergy was reading meters much less than the required every other month. Maybe the WV PSC should have asked for these numbers during the general investigation and simplified everything?
Actual Meter Readings in 2013: 2,238,832
Estimated Readings in 2013: 2,894,376
If the company had been reading meters every other month as it was supposed to, then these two numbers would be equal. This is the plainest picture you're going to get of FirstEnergy's failure.
So, anyhow, Valdes used the $1.99 reading cost to calculate a total incremental cost to switch to monthly meter reading of $6.4M.
But, wait, the company needs to add an additional $1,074,173 in "transition costs" to rectify its own meter reading mistake. FirstEnergy describes these costs as: "estimated additional costs the Companies will incur related to the conversion to monthly meter reading." The company proposed to recover this extra million over a 3-year period, so that it can earn interest on it (at your expense, of course).
This brings your additional cost to read meters monthly up to:
And that is a clearest picture you will get of how your Public Service Commission has failed to protect your interests during its perfunctory "investigation" of FirstEnergy's customer abuse.
The PSC clearly found FirstEnergy to be at fault in the investigation. But, instead of punishing the company for its failure, the PSC has punished the customers who were injured by the failure. As my friend Kery says... when is the failure to perform under a contract ever the fault of the party who was injured? FirstEnergy failed to perform. They should be liable to the parties injured by their action. End of story.
Except, this is West Virginia, where our PSC behaves like a poodle on a leash held by Ohio energy conglomerates. Look up "regulatory capture."
The PSC could have made some token attempt at fairness in its general investigation order. It could have ordered FirstEnergy to absorb the first year's incremental additional cost ($7.5M). It could have ordered FirstEnergy to absorb the $1M transition costs, instead of putting them on the backs of struggling ratepayers for three years.
But it didn't. FirstEnergy was rewarded for its failure. Rewarded for injuring YOU, the customer.
So, what can you do? Tell the PSC what you think! You can submit an online comment here. Select "high profile" case number 14-0702-E-42T from the drop down list on the comment form.
As we move forward with this rate increase case, there will also be opportunities to voice your concerns in person during various public comment hearings around the state. Stay tuned...