Well, that will teach them!
FERC recently released the results of its audit of FirstEnergy transmission company rates. The audit found that some of FirstEnergy's lobbying costs had been passed through in consumer electric rates. The audit also found that FirstEnergy had made other accounting "mistakes" that improperly increased the rates the company collected. The exposure of FirstEnergy's accounting "mistakes" could result in the refund of millions.
Why is it that all utility accounting "mistakes" are in the company's favor? I've never seen a regulatory audit where it was determined that an accounting mistake was in the customer's favor. Maybe they're not mistakes at all... maybe they are "on purposes"?
FERC's audit report even states that perhaps these "mistakes" were not innocent.
FERC recently released the results of its audit of FirstEnergy transmission company rates. The audit found that some of FirstEnergy's lobbying costs had been passed through in consumer electric rates. The audit also found that FirstEnergy had made other accounting "mistakes" that improperly increased the rates the company collected. The exposure of FirstEnergy's accounting "mistakes" could result in the refund of millions.
Why is it that all utility accounting "mistakes" are in the company's favor? I've never seen a regulatory audit where it was determined that an accounting mistake was in the customer's favor. Maybe they're not mistakes at all... maybe they are "on purposes"?
FERC's audit report even states that perhaps these "mistakes" were not innocent.
The DOJ complaint and audit staff’s discussions on internal controls during onsite interviews of FESC employees raised audit staff’s concerns about the existence of significant shortcomings in FirstEnergy and its subsidiary companies’ controls over financial reporting, including controls over accounting for the costs of civic, political, and related activities, such as lobbying activities, performed by and on behalf of FirstEnergy and its subsidiaries. Moreover, these controls may have been circumvented in ways designed to conceal the nature and purpose of expenditures made and, as a result, that led to the improper inclusion of lobbying and other nonutility costs in wholesale rate determinations.
They did it on purpose to steal from consumers.
But, wait, there's more!
But, wait, there's more!
Even more concerning, several factual assertions agreed to by FirstEnergy in DPA and the remedies FirstEnergy agreed to undertake, point towards internal controls having been possibly obfuscated or circumvented to conceal or mislead as to the actual amounts, nature, and purpose of the lobbying expenditures made, and as a result, the improper inclusion of lobbying and other nonutility costs in wholesale transmission billing rates.
Yes, they did it on purpose. It was no accident.
So, what happens to a utility when FERC finds that it willfully practiced creative accounting in order to collect more from its customers than it was entitled to?
Slap on the wrist. It must revise its policies, train its employees, conduct a labor study, and submit a report of how much it will refund to customers. All these activities will be paid for by the ratepayers who were harmed.
FirstEnergy is not fined or penalized in any way. As long as it spits out a bunch of paper and empty promises, it can continue on bilking ratepayers.
This is what always happens when FERC's Division of Audits performs a review and finds the same old errors committed by almost all utilities that serve to unlawfully increase electric rates. The utilities simply made a "mistake" and new policies and training will fix it and prevent it from happening again.
But it always happens again.
When is FERC going to punish its utility pets?
Compare to the way FERC goes after electricity market traders who commit similar "mistakes" that may result in excess profit. FERC hounds them to the ends of the earth and demands ridiculous monetary penalties. But if you're a utility, you're allowed to steal from ratepayers with only a slap on the wrist.
FERC's random audits don't do a thing to deter utility accounting fraud. When utilities are allowed to keep making the same "mistakes" over and over, it's a criminal enterprise that deserves penalties. Utilities have stolen billions from consumers by committing accounting fraud... and they continue to get away with it.
Disappointing... and infuriating.
So, what happens to a utility when FERC finds that it willfully practiced creative accounting in order to collect more from its customers than it was entitled to?
Slap on the wrist. It must revise its policies, train its employees, conduct a labor study, and submit a report of how much it will refund to customers. All these activities will be paid for by the ratepayers who were harmed.
FirstEnergy is not fined or penalized in any way. As long as it spits out a bunch of paper and empty promises, it can continue on bilking ratepayers.
This is what always happens when FERC's Division of Audits performs a review and finds the same old errors committed by almost all utilities that serve to unlawfully increase electric rates. The utilities simply made a "mistake" and new policies and training will fix it and prevent it from happening again.
But it always happens again.
When is FERC going to punish its utility pets?
Compare to the way FERC goes after electricity market traders who commit similar "mistakes" that may result in excess profit. FERC hounds them to the ends of the earth and demands ridiculous monetary penalties. But if you're a utility, you're allowed to steal from ratepayers with only a slap on the wrist.
FERC's random audits don't do a thing to deter utility accounting fraud. When utilities are allowed to keep making the same "mistakes" over and over, it's a criminal enterprise that deserves penalties. Utilities have stolen billions from consumers by committing accounting fraud... and they continue to get away with it.
Disappointing... and infuriating.
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