FERC Issues Letter Order Approving FirstEnergy Service Company's Audit Report Under PA12-5
(Targeted News Service Via Acquire Media NewsEdge) WASHINGTON, Nov. 1 -- The U.S. Department of Energy's Federal Energy Regulatory Commission issued the text of the following delegated order:
In Reply Refer To:
Office of Enforcement
Docket No. PA12-5-000
November 1, 2013
Attention: Mr. Morgan E. Parke
Senior Corporate Counsel
FirstEnergy Service Company
76 South Main St.
Akron, OH 44308
Dear Mr. Parke:
1. The Division of Audits and Accounting within the Office of Enforcement (OE) has completed the merger audit of FirstEnergy Corporation (FirstEnergy) and Allegheny Energy, Inc. (Allegheny). On May 11, 2010, FirstEnergy and Allegheny filed an application requesting Commission authorization for FirstEnergy to acquire Allegheny.1 The proposed transaction in the application requested that Allegheny stockholders receive FirstEnergy stock estimated at $4.7 billion, and Allegheny become a direct wholly owned subsidiary of FirstEnergy. On December 16, 2010, the Commission approved the acquisition by issuing an Order Authorizing Merger and Disposition of Jurisdictional Facilities.2
2. The audit evaluated FirstEnergy's compliance with the conditions established in the Commission's Order Authorizing Merger and Disposition of Jurisdictional Facilities issued December 16, 2010. The audit covered January 1, 2010 through August 30, 2013. The enclosed audit report includes one compliance finding and four recommended corrective actions.
3. On October 4, 2013, FirstEnergy notified audit staff that it will not contest the draft audit report findings and recommendations. FirstEnergy will also submit a detailed plan for implementing audit staff's recommendations and correcting journal entries reflecting an approximate $1.2 million refund to affected customers from its transmission-only subsidiaries with formula rate recovery mechanisms, including Trans-Allegheny Interstate Line Company, Potomac-Appalachian Transmission Highline, LLC, and American Transmission System, Incorporated.
The appendix to the audit report includes a copy of FirstEnergy's response.
I hereby approve the audit report.
4. FirstEnergy should submit a plan to comply with the recommendations of the audit report within 30 days of this letter order. FirstEnergy should make quarterly submissions describing how and when it plans to comply with the recommendations, including the completion date for each recommendation. The submissions should be made no later than 30 days after the end of each calendar quarter, beginning with the first quarter after this audit report is issued, and continuing until all recommendations are completed.
5. The Commission delegated the authority to act on this matter to the Director of OE under 18 C.F.R. section 375.311 (j) (2012). This letter order constitutes final agency action. FirstEnergy may file a request for rehearing with the Commission within 30 days of the date of this order under 18 C.F.R. section 385.713 (2012).
6. This letter order is without prejudice to the Commission's right to require hereafter any adjustments it may consider proper from additional information that may come to its attention. In addition, any instance of non-compliance not addressed herein or that may occur in the future may also be subject to investigation and appropriate remedies.
7. I appreciate the courtesies extended to the auditors. If you have any questions, please contact Mr. Bryan K. Craig, Director and Chief Accountant, Division of Audits and Accounting at (202) 502-8741.
Norman C. Bay
Office of Enforcement
(c) 2013 Targeted News Service
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