FirstEnergy is the first Ohio utility to take advantage of a new method of financing its deferred costs and according to spokesman Mark Durbin it will save customers more than 106-million dollars by the year 2035.
But don't look for the savings to be very large in your monthly electric bill. Durbin tells AkronNewsNow " We're going to save customers some money. It's not a huge amount. It's about 23 cents a month for Ohio Edison customers, but again when you look at the big picture over the years that these costs would be recovered it's a sizeable savings."
Durbin says it's better to save even a small amount on your bill now, than see an increase later.
News Release From FirstEnergy
FirstEnergy Corp’s Ohio utilities are the first to take advantage of Ohio’s new securitization legislation, which became state law in late 2011, allowing them to reduce costs to customers by financing deferred costs using AAA-rated,
long-term securitization financing. The transaction, which closed today, resulted in the FirstEnergy Ohio utilities – Ohio Edison, Cleveland Electric Illuminating and Toledo Edison – achieving savings for customers of $106 million through 2035. Ohio Edison, Cleveland Electric Illuminating and Toledo Edison will begin passing along those savings
directly to their respective customers through lower monthly charges taking effect tomorrow.
In 2012, the Public Utilities Commission of Ohio (PUCO) approved FirstEnergy’s request to securitize deferred costs that were already being recovered from customers under certain approved recovery riders associated with deferred generation and fuel costs, as well as discounts for certain residential customers. The securitization transaction
resulted in the issuance of approximately $445 million of securities known as pass-through trust certificates.
One new rider to recover the costs associated with the securitization transaction will go into effect tomorrow replacing the previously approved recovery riders. “Securitization is a powerful tool for reducing costs for customers as well as
supporting the financial health of our state’s electric utilities,” said Leila Vespoli, executive vice president and general counsel of FirstEnergy. “We anticipate that our 2 customers will collectively save about $106 million when compared to the originally approved recovery riders.”