FirstEnergy Ohio Utilities Secure Two-Year Generation Supply
Posted on: Thursday, 14 May 2009, 17:22 CDT
FirstEnergy Solutions Will Supply 51 Percent
AKRON, Ohio, May 14 /PRNewswire-FirstCall/ -- FirstEnergy Corp. (NYSE: FE) announced today that an auction to secure generation supply and pricing for its Ohio utility companies - Ohio Edison, The Cleveland Electric Illuminating Company and Toledo Edison - has been completed and the results have been accepted by the Public Utilities Commission of Ohio (PUCO).
FirstEnergy Solutions (FES), the company's competitive affiliate, was a successful bidder for 51 percent of the Ohio companies' annual generation needs. FES is the leading competitive retail electricity provider in Pennsylvania and currently has contracts to serve nearly 385,000 customers that are part of 38 government aggregation groups in Ohio secured prior to the auction. FES also serves customers in Illinois, Michigan, Maryland and New Jersey.
A total of 12 bidders qualified to participate in the auction with nine successful bidders each securing a portion of the Ohio utility companies' total generation needs. The auction resulted in an overall weighted average wholesale price of 6.15 cents per kilowatt-hour (kWh) for generation and transmission. The new prices will be in effect starting with usage on June 1, 2009, and continuing through May 31, 2011, for customers who choose not to shop with an alternative supplier.
"The economic slowdown has resulted in lower electric generation sales and significant bidder participation in the auction," said Anthony J. Alexander, FirstEnergy president and chief executive officer. "The results of this auction - which will deliver lower overall average retail generation prices for our Ohio customers - confirm the value of competitive markets for electricity. Our competitive subsidiary will continue to actively pursue new retail customers in Ohio and the surrounding region."
The auction process was managed for the utility companies by CRA International, a global consulting firm with expertise in energy markets and procurement. A descending-clock format was used, which establishes an opening price per kilowatt-hour that decreases with each round of bidding. Participants bid on tranches, with each tranche equal to 1 percent of the total generation needed to serve customers. The auction continued until it resulted in the lowest generation price that would supply all customer needs.
FirstEnergy is a diversified energy company headquartered in Akron, Ohio. Its subsidiaries and affiliates are involved in the generation, transmission and distribution of electricity, as well as energy management and other energy-related services. Its seven electric utility operating companies comprise the nation's fifth largest investor-owned electric system, based on 4.5 million customers served, within a 36,100-square-mile area of Ohio, Pennsylvania and New Jersey; and its generation subsidiaries control more than 14,000 megawatts of capacity.
www.firstenergycorp.com
Forward-Looking Statements: This news release includes forward-looking statements based on information currently available to management. Such statements are subject to certain risks and uncertainties. These statements include declarations regarding our management's intents, beliefs and current expectations. These statements typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "believe," "estimate" and similar words. Forward-looking statements involve estimates, assumptions, known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual results may differ materially due to the speed and nature of increased competition in the electric utility industry and legislative and regulatory changes affecting how generation rates will be determined following the expiration of existing rate plans in Ohio and Pennsylvania, the impact of the PUCO's regulatory process on the Ohio Companies associated with the distribution rate case or implementing the recently approved ESP, including the outcome of any competitive generation procurement process in Ohio, economic or weather conditions affecting future sales and margins, changes in markets for energy services, changing energy and commodity market prices and availability, replacement power costs being higher than anticipated or inadequately hedged, the continued ability of FirstEnergy's regulated utilities to collect transition and other charges or to recover increased transmission costs, maintenance costs being higher than anticipated, other legislative and regulatory changes, revised environmental requirements, including possible greenhouse gas emission regulations, the potential impacts of the U.S. Court of Appeals' July 11, 2008 decision requiring revisions to the CAIR rules and the scope of any laws, rules or regulations that may ultimately take their place, the uncertainty of the timing and amounts of the capital expenditures needed to, among other things, implement the AQC Plan (including that such amounts could be higher than anticipated or that certain generating units may need to be shut down) or levels of emission reductions related to the Consent Decree resolving the NSR litigation or other potential regulatory initiatives, adverse regulatory or legal decisions and outcomes (including, but not limited to, the revocation of necessary licenses or operating permits and oversight) by the NRC (including, but not limited to, the Demand for Information issued to FENOC on May 14, 2007), Met-Ed's and Penelec's transmission service charge filings with the PPUC, the continuing availability of generating units and their ability to operate at or near full capacity, the ability to comply with applicable state and federal reliability standards, the ability to accomplish or realize anticipated benefits from strategic goals (including employee workforce initiatives), the ability to improve electric commodity margins and to experience growth in the distribution business, the changing market conditions that could affect the value of assets held in FirstEnergy's nuclear decommissioning trusts, pension trusts and other trust funds, and cause it to make additional contributions sooner, or in an amount that is larger than currently anticipated, the ability to access the public securities and other capital and credit markets in accordance with FirstEnergy's financing plan and the cost of such capital, changes in general economic conditions affecting the company, the state of the capital and credit markets affecting the company, interest rates and any actions taken by credit rating agencies that could negatively affect FirstEnergy's access to financing or its costs and increase its requirements to post additional collateral to support outstanding commodity positions, letters of credit and other financial guarantees, the continuing decline of the national and regional economy and its impact on FirstEnergy's major industrial and commercial customers, issues concerning the soundness of financial institutions and counterparties with which FirstEnergy does business, and the risks and other factors discussed from time to time in its SEC filings, and other similar factors. The foregoing review of factors should not be construed as exhaustive. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor assess the impact of any such factor on its business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statements. FirstEnergy expressly disclaims any current intention to update any forward-looking statements contained herein as a result of new information, future events, or otherwise.
SOURCE FirstEnergy Corp.
Source: PR Newswire
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