Merger benefits increased significantly from '11 to '12 to '13. As I said, Gary's going to speak more to that, but this is the pretax earnings impact associated with those and you'll see that, that's in excess of $1 billion.

We're also targeting O&M reductions beyond the synergies of between $75 million and $175 million in 2012 and 2013. We expect asset sales in the range of $800 million to $900 million per year, and we expect to reduce debt by $1.5 billion to $2.2 billion over this time period.

...we continue to look for opportunities to reduce O&M. I just want to give you one, very quick example, of what we're doing on the O&M side.

We closed the transaction February 28 of last year. There are roughly 75 major applications that have to get integrated between the 2 companies. For some of the operating savings to occur, those systems have to be integrated. I'm pleased to say that our IT folks are basically going to integrate all of those applications in record time, and they'll make their cut-over shortly. They've had 5 test runs, so you'll see that some of the synergy has been accelerated and some of the synergies too, become, as we integrate our systems. And we're quite pleased with where we are. We'll continue to look for incremental costs. It's kind of our nature. But we're not going to do anything simply for a short-term benefit that puts the company at a longer-term risk. That's just not something we are going to do. Everything we are doing is to place FirstEnergy in the best possible forward position.

Signatories to this brief raise a number of challenges to the Orders. Several object that the transmission-planning mandate exceeds FERC’s statutory authority, which they argue is limited to encouraging, not requiring, coordinated planning. Various petitioners argue that FERC’s Orders are arbitrary and capricious because they are aimed, not at correcting specific abuses or unreasonable existing rates, but at addressing what FERC describes as the “theoretical threat” that existing planning arrangements might not produce a “more efficient and cost-effective” transmission system. Several petitioners object that mandating consideration in planning processes of transmission needs driven by myriad federal, state, and local public-policy requirements violates the FPA by making the needs of load-serving entities (e.g., public utilities) an optional consideration and is arbitrary and capricious. Some petitioners object that the cost-allocation mandate exceeds FERC’s statutory authority by allowing and directing allocation of transmission costs to entities having no customer or contractual relationship with the transmission provider.
Several petitioners argue that FERC lacks authority to order public utilities to remove exclusive construction rights from their tariffs and to adopt mechanisms allowing third parties to develop the transmission facilities the utilities need to satisfy their service requirements. These petitioners argue that FERC’s actions reduce the efficiencies inherent in vertical integration and arbitrarily interfere with their public-service obligations to maintain reliable service. Some petitioners also challenge the Orders for infringing upon the authority reserved to the States as the States, not FERC, regulate transmission development. Non-jurisdictional utility customers contest FERC’s authority to expand the reciprocal-service condition on their receipt of transmission service to include the Orders’ planning and cost- allocation mandates. An association of jurisdictional utilities objects that FERC’s refusal to invoke FPA section 211A to impose the Orders’ mandates on non- jurisdictional utilities was arbitrary. These and several other challenges to the Orders are discussed in the issue-specific briefs.

The Orders, they noted, were based, not on evidence of specific problems, but on FERC’s determination that “inadequate transmission planning and cost allocation requirements may be impeding the development of beneficial transmission lines,” and that the Orders “could” or “may” identify transmission solutions that “meet the needs of a transmission planning region more efficiently or cost-effectively.”

...the companies "choked/came back in/ and said it's a deal ... only ask is completion of NEPA by Oct '12."

In October of 2009, the Court remanded the rate methodology back to FERC, finding that the Commission had not provided sufficient record evidence to justify its findings that the existing allocation practice for new facilities at and above 500 kV was unjust and unreasonable, and the Commission had not adequately supported its conclusion that the postage-stamp methodology was just and reasonable. The court found that the Commission’s reliance on the difficulty of measuring benefits for above 500 kV facilities, and the resulting likelihood of litigation, failed to justify the Commission’s decision. The court stated that the Commission had failed to show “the absence of any indication that the difficulty exceeds that of measuring benefits to particular utilities of a smaller-capacity transmission line.” The court further found that the Commission failed to justify requiring PJM to adopt a region-wide, postage-stamp cost allocation methodology for new transmission facilities that operate at or above 500 kV.

Meyers said the companies have been aware of the issues and will assist the PSC.

“It’s just an exercise that we need to go through, and hopefully, when we come to the end of the investigation and the recommendations and everything else, we can be stronger for it and have a good outcome for our customers,” Meyers said.

FINDINGS OF FACT
1. FirstEnergy recently acquired control of Mon Power and PE. Monongahela Power Company, et al., Case No. 10-0713-E-PC (Commission Order, December 16, 2010).
2. Certain FirstEnergy customers in West Virginia have received high bills which may be attributable to estimated OT average bills that may not have reasonably reflected historical usage and require further review.

1. Following the acquisition of Mon Power and PE in 2010, what changes, if any, to meter reading and customer billing has FirstEnergy implemented?
2. What data does FirstEnergy use to derive estimated or average bills?
3. To what extent has FirstEnergy reviewed or analyzed each current method of calculating estimated or averaged monthly bills of West Virginia customers after the acquisition of Mon Power and PE?
4. What was the effect of the severe storms in 2012 on how FirstEnergy calculated bills or its meter reading practices?
5. What is the total number of complaints received by First Energy from West Virginia customers about meter reading, estimated bills or average billing. Please provide a breakdown by complaint category.
6. What percentage of FirstEnergy customers in West Virginia had actual company employee meter readings (i) from one to five times per consecutive twelve month period, (ii) six times per consecutive twelve month period, (iii) more than six times per consecutive twelve month period over the last twenty-four consecutive months?
7. Did FirstEnergy maintain and incorporate historical billing data that pre-dated the merger into its calculation of estimated bills or average payment plans?
8. Describe in detail the manpower and equipment currently used to provide meter reading to Mon Power and PE customers and provide the same information for that activity prior to the FirstEnergy acquisition.
9. Describe in detail the manpower and equipment currently used to provide billing and customer service to Mon Power and PE customers and provide the same information for that activity prior to the FirstEnergy acquisition and after the FirstEnergy acquisition.
10. Describe the meter reading scheduling for Mon Power and PE, and describe the alternatives and options that are available to Mon Power and PE to reschedule or otherwise handle unexpected interruptions to normal meter reading schedules such as weather related incidents, unscheduled employee leave, transportation equipment failures or other such disruptive incidents.
11. Does FirstEnergy collect metrics regarding its customer service call center or other customer service contacts with ratepayers for any purpose including internal evaluations, planning and budgeting, or external reporting to other regulatory agencies? Provide a twenty-four month summary of each available customer service metric for all customers and separately for West Virginia customers along with a brief description of each metric.
12. What assistance does FirstEnergy provide to customers that receive large actual bills following a period of estimated bills?

The purpose of this general investigation is not to address individual customer bills directly. We recognize that considering the high level of formal and informal filings by individual customers to date, there may be a tendency for individuals to want to address their grievances in this proceeding. Each customer is entitled to specific evaluation of the particulars of individual billing and payment issues and such evaluation is best accomplished through the formal and informal review processes available for individual complaints. Customer-specific, formal and informal matters will continue to be resolved individually. This proceeding will focus on the practices, policies and procedures in place at Mon Power and PE and evaluate the strengths and weaknesses at a structural level.

We feel that the current billing problems are an unanticipated consequence of the company’s efforts to reduce expenses that can only be corrected by making sure that the company is being adequately funded to read meters with the frequency stipulated by the tariff.  This deficiency can only be remedied through a new base rate case. We also request that amounts necessary to read meters as required that were not spent by the company over the past two years be refunded to ratepayers, and that the Commission impose any and all fines, penalties and reprimands available under its authority consistent with its findings, among other relief measures.