January’s Extreme Weather
Across the region, January 2014 was an extremely cold month, with temperatures reaching record lows. In fact, during the polar vortex, absolute temperatures dropped to -10 degrees with a wind chill of -33 degrees. This extreme weather resulted in record levels of energy use.
During this time, PJM Interconnection (PJM) – the regional transmission organization that coordinates reliability and wholesale electricity in our region – initiated emergency procedures that included the purchase of reserve electric generation to keep the electric system operational throughout these severe conditions. PJM billed these costs to suppliers that serve customers throughout the region, including FirstEnergy Solutions.
What this Means to FirstEnergy Solutions' Residential Customers
FirstEnergy Solutions has waived a proposed surcharge for residential customers associated with this January’s polar vortex. The previously announced one-time, $5 to $15 per customer surcharge would have appeared on customers’ June, July or August 2014 bills.
What this Means to FirstEnergy Solutions' Small Business Customers
FirstEnergy Solutions invoiced certain small business customers with contracts that deem these additional charges as a “pass-through event.” These charges apply to any small business customer whose account is identified by its electric utility as non-residential. The amount of the charge – called the RTO Expense Surcharge – will be approximately 1-3 percent of the total amount you spend on electric generation supply annually.
Please note that this charge did not change the contract price. It appeared as a separate line item on an upcoming bill. The charge was based on usage for January.
Questions? Please take a look at the following list of questions, or call us at 1-888-809-8436.
Frequently Asked Questions
Q. What specific ancillaries are being passed through to me?
A. The ancillaries being passed through include Operating Reserves, Synchronous Reserves, Day-Ahead Scheduling Reserves and Regulation.
Q. How was the amount of my charge determined?
A. An average rate per kilowatt-hour for your utility was calculated and multiplied by your January use, adjusted for losses.
Q. You provide a range for the charge. Will my charge be at the low end or the high end of the range?
A. The amount of your specific charge will depend on which electric utility serves you and the amount of your electric usage in January.
Q. Will this be just one charge or spread over the span of a few months?
A. This charge will appear only on one month’s bill.
Q. Aren’t these costs already included in my price?
A. No. During this period of extreme temperatures, significant increases in energy consumption, emergency operations, and other factors, PJM incurred extremely high ancillary costs to purchase additional reserve generation needed to keep the bulk electric system reliable. These costs and additional charges were, in turn, invoiced by PJM to all suppliers serving customers throughout the region. Pursuant to your agreement with FirstEnergy Solutions, these additional costs and charges are deemed a “Pass-Through Event.” This provision in the contract is intended to protect the customer and allow FirstEnergy Solutions the flexibility to respond to extraordinary, unpredictable and unforeseen events. As a result, electric generation costs for the month of January will be adjusted through a one-time charge, which will appear as a separate line item on your bill but will not change your contract price.
Q. Why am I being billed now if these events occurred in January?
A. PJM follows a 60-day reconciliation process. We wanted to bill you the actual amount instead of having to reconcile the charge in a subsequent month’s bill.
Q. Because of these charges, can I leave my contract?
A. The ability to exit the contract may be subject to early cancellation fees. However, it’s important to note that being in your contract with FirstEnergy Solutions actually helped protect you from other much more significant price increases that customers on a variable priced contract experienced during this same time. While you are receiving this charge, the amount of this charge is much less than you would have paid if you were on a variable price.
Q. What happened in PJM during January?
A. For more information, click here to view PJM’s Analysis of Operational Events and Market Impacts During the January 2014 Cold Weather Events*
*When you click this link, you will open a third-party website. This site is maintained by a third-party, not by FirstEnergy Solutions, and FirstEnergy Solutions is not responsible for the content.