The Companies responding to this General Investigation proceeding have provided a lot of excuses to the Commission as to why so many customers received multiple consecutive poorly estimated bills that led to dramatically high “true up” bills.
Originally, the Companies tried to convince the Commission and the public the problems
were mainly caused by the timing and size of the Derecho and Super Storm Sandy.
When the problems continued, the Companies started providing further excuses, but did
not take responsibility for their role in creating many of the problems themselves and compounded the problem further by making unreasonable demands for payments from the impacted customers. In Staffs opinion, they still have not taken that responsibility.
The Derecho and Super Storm Sandy undeniably played a significant role in the problems underlying this case. However, all along the way, the Companies made poor decision after poor decision with little to no thought as to how it might impact their customers.
These poor decisions lead to multiple and continued violations of their tariffs. Staff takes
these violations very seriously and believes it is time the Companies own up to their mistakes and provide the Commission with concrete evidence these types of problems
will not reoccur. Further, the Companies should be required to either correct the ongoing problems with their estimation routine or switch from bi-monthly to monthly meter reading.

Hurricane Sandy struck the service territories with large amounts of heavy, salt-laden, snow that tore down trees and power lines...

It is easy, and some may say unfair, to play Monday morning quarterback with the decisions of the Companies. Staff does not believe it is unfair to do so in this circumstance. A poor decision here or there is just that, a decision that did not work out.
What we have here is something completely different, poor decision on top of poor
decision on top of devastating storms on top of more poor decisions with no management
thought of potential impacts to customers. This is a pattern of behavior. It appears FirstEnergy had a plan for integration and was determined to follow through with that
plan no matter the result. Little consideration was given to the customers, “merger
synergy savings” had to be captured. Indeed the Companies suspected as early as
September of 2012 there may be problems, but did nothing to attempt to resolve them
until April 2013. At that point, the problems had become so widespread the Companies
had no choice but to try and address them. However, shockingly, the Companies
continue to act as though they were simply a victim of circumstance. Generally, Staff believes the Commission should send a strong message to the Companies that this type of behavior will not be tolerated, that the Commission believes the Companies did indeed violate their tariff in multiple ways and that continued violations will be looked upon
very unfavorably.

Bad historical usage data begets bad data and, thus, CAD believes the only way to correct the problem caused by the Companies’ failure to conduct bi-monthly reads of residential meters is to obtain one year’s worth of reliable data from actual monthly meter reads. It is the goal of the CAD that this matter be resolved in the best possible manner for customers of MP and PE, who have undeniably suffered - and, in some instances, continue to suffer - the ill effects of the Companies’ meter reading and billing practices.

Throughout the course of this proceeding, the Companies have attempted to place the
majority of the blame for their billing and meter reading problems on the Derecho that occurred in June 2012 and Superstorm Sandy, which occurred in October 2012. However, while the storms may have exacerbated the Companies’ existing problem, it is inaccurate to contend that the storms caused the billing problems so many customers have faced. In actuality, the evidence shows that the merger of Allegheny Power into FirstEnergy in 2011 and subsequent transition issues in the wake of the merger, including understaffing, transitioning from the Allegheny billing system to the FirstEnergy billing system, and the questionable timing of the meter route “renumbering” project, created this problem.

Q. Okay. All right. And you mentioned EPRI and the EPRI study, and I know that you --- while we’re on the subject, on page 11 of your testimony, your Direct testimony, you’d made a change at line eight. You state that the EPRI study is now expected to be completed by January 6th, 2014; correct?
A. Correct.
Q. Do you know why it’s been pushed back from December 31st?
A. I received an e-mail this morning from them requesting a little bit more time, because they’ve been meeting with the teams that actually were on site, and after they’ve had a couple of their meetings, they just feel like they’re going to need a little more time.
Q. Now, do you participate in these meetings? A. I have been.
Q. I’m sorry, you have been?
A. Yes.
Q. Okay.
A. Now, I have not been making every single one of them, but ---.
Q. I mean, they’re weekly meetings?
A. That’s right. Recently they had me come daily.
Q. Okay. When did this --- when did the EPRI review begin? I mean, it’s been several months now in the making; correct?
A. Yeah, I believe we signed the statement of work with them in July.
Q. And what are you --- what specifically are you --- are the Companies having EPRI look at? I mean, what is the purpose?
A. What we’re doing is we’re trying to simulate the estimation routine with having lots of good data, and then going through and creating all those scenarios of every other estimate --- every other month estimate, two months in a row estimate, three months in a row estimate, and letting the routine take that data and determining --- I guess we’re trying to figure out where are those checkpoints that we might need. Are we not applying something appropriately that we should be? So we’re more or less --- we’re calling it forensics. That’s basically what they’re doing for us, trying to help us determine, you know, with the data available where we see some issues or breakdown and how can we improve our routine.
Q. And is EPRI going to tell you how it should be improved, assuming it finds breakdowns?
A. Yes.
Q. Okay. Now, is the Company’s plan to implement whatever correction EPRI recommends?
A. I think it’s a little early for me to say that, because I don’t know all of the expense associated with what they would ask us to implement or recommend we implement.
Q. Okay. So there’s a chance that EPRI may say you need to do these 20 things, for example, and the Company says we don’t have the money or the resources to do any of those; we’re just going to disregard your recommendation? That’s a possibility; correct? A. Anything’s possible.

Frederick County Commissioner Billy Shreve is asking Potomac Edison to donate some land for a park; specifically, the 150-acre Browning Farm, where the utility was planning to build a substation for the Potomac Appalachian Transmission Highline.

He called it a win-win for First Energy and county citizens.

FirstEnergy is trying to reach new labor agreements with two of its Utility Workers Union of America bargaining units.

They include Local 102, which represents several hundred workers in FirstEnergy’s Potomac Edison territory in Maryland and West Virginia and its West Penn Power territory in Pennsylvania.

The members of Local 102 are working as linemen, substation workers, meter readers and technicians.

Robert Whalen, system president of Local 102, said Thursday that so far, FirstEnergy hasn’t threatened to lock out his Potomac Edison and West Penn members. Local 102 began contract talks with FirstEnergy in March 2013.

About 125 of Local 102’s members work at PE service centers in Williamsport; Frederick, Mount Airy and Thurmont, Md.; Martinsburg and Berkeley Springs, W.Va.; and Waynesboro and McConnellsburg, Pa.

Whalen said many of the company’s offers are unacceptable.

“Every benefit — health care, long-term disability, dental plan, vision plan, 401(k) — that’s in our contract now, they (FirstEnergy) want to make them completely at the discretion of FirstEnergy to modify, terminate or amend,” Whalen said.

Company spokesmen disputed such arguments, and said FirstEnergy’s offers have been fair.

The company is “cautiously optimistic we can come together on something,” spokesman Todd Meyers said about negotiations with Local 102. “I think we have a good offer.”

But as to the lockout in Pennsylvania, FirstEnergy spokesman Scott Surgeoner said the company isn’t backing down.

“We think our last best offer is very, very fair, and we are committed to seeing this lockout through,” Surgeoner said.

FirstEnergy and other utilities began to slide in May after Federal Reserve Chairman Ben Bernanke suggested that the central bank could begin go to pull back on its stimulus measures.

FirstEnergy, which serves 6 million customers across the Midwest and the Mid-Atlantic, also got hit after the company posted a nearly 50% drop in earnings for the third quarter due to cooler than usual summer temperatures cutting the need for air conditioning. Shares have recently been trading at their lowest levels in a decade.

Mr. Akins said he wants to avoid the bruising battles that delayed or doomed big projects in the past, like the 275-mile Potomac-Appalachian Transmission Highline project from West Virginia to Maryland. AEP and partner FirstEnergy Corp. dropped development plans for the complex project in 2011.

"Sometimes, we were just dreaming" that the companies could get enormous power lines built across multiple states, Mr. Akins said. He said AEP now is focusing on shorter projects blessed by federal regulators that eliminate grid bottlenecks. "It's where you want to put your money," he said.

This includes traditional tactics, such as upgrading power poles and trimming trees near power lines. But it also encompasses newer approaches, such as microgrids and energy storage, which allow operators to quickly reconfigure the system when portions of the grid go down. Implicit to such plans is the need to ensure uninterrupted power to critical sites such as oil and gas refineries, water-treatment plants, and telecommunication networks, as well as gasoline stations, hospitals, and pharmacies.

Some of the nation’s leaders seem receptive to such approaches.