Before filing the lawsuit, Skinner sent a letter to Potomac Edison, asking the company to correct its billing inaccuracies as required by the Consumer Credit and Protection Act. Potomac Edison representatives failed to respond.

Compliance Trends
During the past several years, DAA observed noncompliance in certain areas that warrant highlighting for jurisdictional entities and their corporate officials. Although there are other areas of noncompliance associated with the topics presented below, the areas discussed relate to areas where DAA has found consistent patterns of noncompliance. Greater attention is needed in these areas to prevent noncompliance and to avoid enforcement action.

Formula Rate Matters. DAA rigorously examines the accounting that populates formula rate recovery mechanisms that are used in determining billings to wholesale customers. In recent formula rate audits, DAA observed certain patterns of noncompliance in the following areas:
Merger Goodwill – including goodwill in the equity component of the capital
structure absent Commission approval;
Depreciation Rates – using state-approved, rather than Commission-approved,
depreciation rates;
Merger Costs – including merger consummation costs (e.g., internal labor and other general and administrative costs) without Commission approval;
Tax Prepayments – incorrectly recording tax overpayments which are not applied
to a future tax year’s obligation as a prepayment leading to excess recoveries
through working capital;
Asset Retirement Obligation (ARO) – including ARO amounts in formula rates,
without explicit Commission approval;
Below-the-Line Costs – attempting to move below-the-line costs into formula rates (e.g., lobbying, charitable contributions, fines and penalties, and compromise settlements arising from discriminatory employment practices); and
Improper Capitalization – seeking to include in rate base (and earn a return on) costs that should be expensed.

“This company’s going to experience a thousand points of pain,” UWUA Local 102 President Bob Whalen said.

Whalen said, however, that after a 20-minute preliminary meeting, representatives only spent five minutes around the negotiating table on Monday. He said after reading the first item on the union’s list of contract change requests, the extension of health care benefits for retirees, FirstEnergy ended the discussion.

“They said, ‘No, the meeting is over.’ They did not listen to the rest of our proposals,” Whalen said.

During the Merger integration process, FirstEnergy and Allegheny will review existing procedures and policies to determine “best practices” and how to implement them, ensuring that customer benefits appropriately outweigh the associated costs and considering any related effects on customer service and customer satisfaction levels.