MONOPOLY DESK · SERIOUS

Ohio PUCO docket 20-508-EL-RDR: FirstEnergy’s $1.5B grid rider bypasses rate-case scrutiny; ratepayers carry the risk

Ohio regulators approved FirstEnergy’s request to continue a grid-modernization rider worth $1.5 billion over five years, despite the HB6 scandal and incomplete accounting. The rider allows the utility to earn returns on capital without a full rate case, shifting risk to ratepayers.

By Mara Quinn , rate case watchdog · Jul 4, 2026 · Ohio · Checked by Ezra

The Columbus Dispatch reported that Ohio regulators approved FirstEnergy’s request to keep collecting a grid-modernization rider worth $1.5 billion over five years, even after the HB6 bribery scandal and despite consumer advocates noting the utility never fully accounted for how earlier rider money was spent. ^[1]

Docket 20-508-EL-RDR is a textbook case of a single-issue rider that exists to bypass general-rate-case scrutiny. Every new rider is a ratchet that moves risk to ratepayers while the utility keeps the return. Here, the rider recovers capital costs for distribution automation and advanced metering, but with no earnings test to ensure the benefits materialize. The utility earns its allowed return on every dollar of rider-funded capital, while ratepayers bear the cost of any overruns or underperformance.

The $1.5 billion over five years translates to roughly $300 million annually. On a typical residential bill of $100, this rider alone likely adds $5 to $10 per month, depending on how the costs are allocated. The utility pockets the return; the ratepayer pays the principal plus profit.

The HB6 scandal revealed that FirstEnergy funneled money to secure a legislative bailout for coal and nuclear plants. The grid rider now faces similar trust issues: how much of the $1.5 billion is actually needed, and what happened to the money from the prior rider? Consumer advocates and the Office of the Ohio Consumers’ Counsel have been structurally outgunned, as the utility’s rate-case team is a line item in your bill, while the public’s side is a rounding error.

The reform is straightforward: sunset all riders and consolidate them into base rates at the next general rate case. Until then, impose an earnings test: if the utility’s earned ROE exceeds its authorized ROE by more than 50 basis points, the excess should be refunded to ratepayers. Ohio’s commission should also require a full, audited accounting of prior rider spending before approving any new rider.

The alternative

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Require that every rider have a sunset date of no more than three years, with automatic consolidation into base rates at the next general rate case. Attach an earnings test: if the utility’s earned return on equity exceeds its authorized return by more than 50 basis points, the excess must be refunded to ratepayers. And before any rider is approved, the utility must file a full, audited accounting of all prior rider spending, with the burden of proof on the utility to show that the spending was prudent and produced the promised benefits.

See the working →

Levers · rider sunset · earnings test · prudence review · consolidation into base rates

Mara Quinn · Rate Case Watchdog, Monopoly Desk

Mara covers the state rate cases where household electric bills are actually decided — the marathon regulatory hearings that set how much a utility can charge and what profit it's guaranteed. Almost nobody attends them; her job is to attend all of them. She reads the utility's own filings line by line, translating dense revenue requirements and guaranteed returns into what they cost a typical family, and she always names who was in the room and who wasn't. Expect the docket number, the deadline to weigh in, and a clear map of where the money hides.

Edited by Victor; fact-checked by Ezra ; signed off by Margaret. Full profile →

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