When First Energy Solutions (FES), a retailer serving nearly 1 million electricity customers entered bankruptcy in April, Ohio regulators were concerned. After all, FES is the electric generation supplier of a large number of electricity municipal aggregations across Ohio. What would happen to consumers as FES fought its way through bankruptcy proceedings? It looks like a white knight has appeared on the horizon — Exelon Constellation.
Exelon Constellation Makes an Offer
Exelon is a Fortune 100 energy company and the country’s largest utility company by customer count. On July 11th, 2018, they offered to purchase First Energy Solutions for $140 million. If the purchase is approved by the bankruptcy court, all 900,000 FES customers will become part of the Exelon Constellation family in the 4th quarter of 2018. That will bring Exelon’s total customer count over 3 million.
First Energy Solutions ended up in the bankruptcy courts in April of this year, when First Energy decided to focus on their regulated energy distribution business. (First Energy owns 3 utility companies in Ohio, Ohio Edison, Toledo Edison and The Illuminating Company.) First Energy separated from their retail operations (FES) and unprofitable coal and nuclear power plants, and declared bankruptcy for those companies.
Regulators at the Public Utility Commission of Ohio carefully watched the FES bankruptcy proceedings, due to the large number of residential and commercial customers served by FES. FES is the largest provider under the Ohio community aggregation program. They are the default electric generation supplier for community aggregations in 264 townships or counties.
What is Community Aggregation?
OH community aggregation is a collective shopping program designed to drive competitive shopping and electricity choice in Ohio. Local communities are allowed, by law, to join their citizens and small business owners together, to buy electricity as a group.
Most community aggregations are opt-out. This means that all residents who have not shopped for a competitive supplier, or didn’t opt-out of the bidding process are automatically switched to the winning supplier in a competitive auction. Community aggregations typically secure an energy contract for 2-3 years.
First Energy Solutions was one of the most active electricity suppliers bidding on these Ohio community aggregations.
Am I a First Energy Solutions Customer?
If you don’t know who your electric generation supplier is, it’s easy to find out — just look at your bill from your electricity distribution company.
Or, check the list of communities served by FES’ community aggregation program. FES aggregations include Akron, Canaan, Lancaster, Marietta, Sandusky and Toledo.
Should I Start Shopping for a Supplier?
There’s no reason to be concerned about your electricity supplier. Even if the Exelon acquisition of FES is not approved, your lights will stay on while FES is in bankruptcy.
However, this is a great time to review the price you are paying for your electricity in Ohio. If you are on a rate that was set during an aggregation auction 2 or 3 years ago, your rate may be higher than current market prices.