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Ohio Supreme Court sides with FirstEnergy in dispute over electric discounts to homeowners

By Betty Lin-Fisher
Beacon Journal business writer

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The Ohio Supreme Court has ruled that a Geauga County lawsuit regarding all-electric discounts against FirstEnergy must be pursued through state regulators and not the judicial system.

In a 6-1 decision Wednesday, with Justice Paul Pfeifer dissenting, the court said the group of residential electric customers in Northeast Ohio who had claimed Akron-based FirstEnergy Corp. defrauded them by terminating alleged “lifetime” rate discounts must go to the Public Utilities Commission of Ohio (PUCO).

The decision, authored by Justice Yvette McGee Brown, reversed a ruling by the 11th District Court of Appeals. That court had reversed a trial court’s dismissal of the customers’ fraud claim, saying it was a civil action and that PUCO’s special expertise was not required to determine whether the utility’s actions met the legal criteria for civil fraud.

FirstEnergy eliminated long-standing discounts for new all-electric customers after January 2007. In the winter of 2009, those homeowners saw dramatic increases in heating bills after the PUCO approved the elimination of discounts for grandfathered customers. Some residents reported their bills doubled.

In early 2010, after complaints from residents and politicians, the PUCO ordered that some all-electric discounts be restored and expanded temporarily through the winter.

In 2011, the PUCO approved extending a freeze on rates through March 31, 2013, and taking the largest of the discounts and phasing it out over six years.

The company has said about 300,000 customers in FirstEnergy’s territories served by the Illuminating Co., Ohio Edison and Toledo Edison have all-electric homes.

A call for comment from one of the lawyers believed to be representing the consumer group was not returned. The head of a grass-roots organization that had fought loss of the lifetime all-electric discounts also did not return a call.

Jason Gilham, spokesman for the PUCO, said the agency could not comment on something that might come before the commission.

FirstEnergy spokesman Mark Durbin said the company has “said all along that the Public Utility Commission of Ohio has exclusive jurisdiction over rate issues. We argued to overturn the appellate court decision, and that is what the Supreme Court did. We obviously are pleased with the decision.”

Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her on Twitter at www.twitter.com/blinfisher and see all her stories at www.ohio.com/betty



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