PUCO Opens Audit of FirstEnergy Storm Costs: $245 Million Being Recovered From Customers

PUCO Opens Audit of $245 Million in FirstEnergy Storm Costs Included in Customer Rates

The Public Utilities Commission of Ohio has begun the process of hiring an independent auditor to review approximately $245 million in deferred storm restoration expenses associated with three FirstEnergy electric utilities.

PUCO issued Request for Proposal RA26-SCD-1 on August 5, 2026. The audit is being conducted under Case No. 26-798-EL-UNC and will examine the reasonableness of storm restoration costs deferred by Ohio Edison Company, The Cleveland Electric Illuminating Company and The Toledo Edison Company. Audit proposals are due September 2, 2026.

The opening of the audit is not an accusation that FirstEnergy or any of its utilities acted improperly. It also does not mean that PUCO has rejected the expenses. The review is intended to help determine whether the costs were reasonable and eligible to be recovered from customers.

The approximately $245 million is a combined balance associated with all three utilities. It is not an amount attributed solely to Ohio Edison or its customers. PUCO’s public announcements do not provide a company by company breakdown showing how much of the balance belongs to Ohio Edison, The Cleveland Electric Illuminating Company or The Toledo Edison Company. They also do not identify each storm included in the balance.

That distinction is important for Stark County and other communities served by Ohio Edison. No verified public figure is currently available from PUCO’s announcements showing Ohio Edison’s individual portion of the $245 million or how much a typical Ohio Edison customer is paying specifically toward the storm costs.

The expenses were addressed through a larger electric distribution rate case. FirstEnergy filed its application on May 31, 2024, on behalf of the three Ohio utilities. That proceeding is PUCO Case No. 24-468-EL-AIR. FirstEnergy initially sought approximately $190.3 million in additional annual distribution revenue across the three service territories. That request covered the broader distribution rate case and should not be confused with the separate $245 million balance of previously deferred storm restoration expenses.

On November 19, 2025, PUCO established new distribution rates for the three utilities and initially authorized the deferred storm expenses to be spread across five years. Under that decision, Ohio Edison was to set rates producing an annual revenue decrease of approximately $17.4 million. Toledo Edison was to receive an annual revenue decrease of approximately $24.4 million, while Cleveland Electric Illuminating was to receive an annual increase of approximately $75.9 million. Together, those November figures produced an overall annual revenue increase of approximately $34.1 million across the three utilities, which PUCO described as approximately $34 million.

PUCO reconsidered part of that decision on February 18, 2026, citing concerns about affordability. The commission ordered the utilities to spread the approximately $245 million in deferred storm restoration expenses across 25 years instead of five years. PUCO also reaffirmed that the expenses would remain subject to further review and audit. Updated tariffs implementing the decision were ordered to take effect March 1, 2026.

Spreading the balance across 25 years reduces the amount collected during any single year. It also means customers could continue paying toward the deferred expenses for decades.

PUCO’s public announcements do not state whether additional interest or carrying charges will be added during the 25 year period. They also do not provide a calculation showing the portion of an average Ohio Edison customer’s monthly bill associated with the balance. The February decision also changed the annual revenue figures for the three utilities. Ohio Edison was ordered to set rates lowering its annual revenue by approximately $24.5 million. Toledo Edison was ordered to lower its annual revenue by approximately $29.5 million. Cleveland Electric Illuminating was authorized to increase its annual revenue by approximately $48.7 million.

As published by PUCO, those three figures net to an overall annual revenue decrease of approximately $5.3 million. PUCO said the February decision represented an approximately $39.4 million reduction in combined annual revenue compared with what the commission had authorized in November 2025.

Ohio Edison and the other utilities are responsible for operating their electric distribution systems, repairing damaged equipment and restoring service after storms. Electric customers may select another company to supply the electricity they use, but the local distribution utility continues delivering the electricity, maintaining the poles and wires and responding to power outages. In Ohio Edison’s service territory, Ohio Edison remains the company responsible for those local distribution services.

That responsibility does not automatically mean FirstEnergy’s investors must absorb every storm restoration expense. Under Ohio’s regulated utility system, the utilities initially pay employees, contractors and vendors to restore service and repair damaged infrastructure. PUCO then determines which costs may be recovered from customers through regulated distribution rates. Customers can therefore be required to pay reasonable storm restoration expenses as part of the cost of operating the electric distribution system. However, the utilities are not automatically entitled to recover every expense they claim.

Ohio law requires PUCO to consider a utility’s management policies and administrative practices when setting rates. State law specifically says the commission shall not allow operating and maintenance expenses incurred through management policies or administrative practices that PUCO considers imprudent. That means costs linked to imprudent management should not be recovered from customers through regulated rates. The audit will help PUCO determine whether the storm costs under review were reasonable.

The practical division of responsibility is that Ohio Edison and the other utilities operate and repair their systems. PUCO decides which expenses may be recovered through rates. Customers pay the costs PUCO authorizes, while expenses the commission disallows would not be recovered from customers through this proceeding.

The timing of the audit is also important. PUCO ordered updated rates reflecting the 25 year recovery period to take effect March 1. The commission then issued the request for an independent auditor on August 5.

That sequence does not establish wrongdoing by PUCO or FirstEnergy. It does mean the revised rates took effect before the newly announced independent audit was completed.

PUCO’s August announcement does not say that collection will be suspended during the audit. It also does not explain how customers would be credited if the commission later determines that part of the balance should not have been recovered. Several important questions therefore remain unanswered.

PUCO’s public announcements do not identify the storms included in the $245 million balance, Ohio Edison’s individual share, the amount already collected since March 1 or the cost for a typical Ohio Edison customer. The announcements also do not explain whether customers will pay additional carrying costs over 25 years or what specific remedy would be used if the audit results in expenses being disallowed. The auditor will review the costs and present findings. PUCO will remain responsible for making the final regulatory decisions.

For now, the verified facts show that PUCO authorized the three utilities to spread approximately $245 million in previously deferred storm restoration expenses across 25 years while keeping those costs subject to further review and audit.

Ohio Edison and the other utilities are responsible for maintaining their systems and restoring service. Ohio Edison and the other utilities are responsible for maintaining their systems and restoring service following storms. Under PUCO’s current order, customers are already being charged through distribution rates for the recovery of approximately $245 million in deferred storm restoration expenses across the three utilities.

Those expenses remain subject to an independent audit. If PUCO determines that any costs were unsupported, unreasonable or caused by management practices the commission considers imprudent, those costs could be disallowed or addressed through later rate adjustments.

The audit will help determine how much of the approximately $245 million should ultimately remain the responsibility of customers and whether any portion should instead be absorbed by FirstEnergy and its utilities.