FE · 10-Q · 2026Q1 · Full report

Ohio Regulatory Matters & Restitution

FIRSTENERGY CORP · 2026-04-28 · Importance 52 · Surprise 68

The Ohio Companies filed for base distribution rate increases and on November 19, 2025 the PUCO issued an order approving a net increase in base distribution revenues of approximately $34 million with a 9.63% ROE and a hypothetical capital structure reflecting a 48.8% debt / 51.2% equity mix, authorizing continued Rider DCR and changing pension/OPEB recovery method. The PUCO order also authorized recovery of certain deferred costs for storm restoration, O&M and energy efficiency programs but led to the Ohio Companies recognizing a $352 million pre‑tax impairment charge related to future recovery disallowances of certain previously capitalized amounts. The companies filed compliance tariffs and rehearing requests; the PUCO granted rehearing to reconsider the order and later on February 18, 2026 modified amortization for storm restoration costs from five to twenty‑five years subject to prudency review and approved revised final tariffs effective March 1, 2026.

Key facts

• As a result of the November 19, 2025 PUCO order, the Ohio Companies recognized a $352 million pre-tax impairment charge related to future recovery disallowances of certain previously capitalized amounts.
• On April 22, 2026, the Ohio Companies submitted pre-filing notice to the PUCO of their intent to file a Three-Year Rate Plan in May 2026 that includes plans to invest on average $800 million annually to focus on improving reliability for customers.
• On January 7, 2026, the PUCO issued an order directing the Ohio Companies to pay restitution and refunds totaling approximately $275 million ($213 million after-tax), which was recognized in the fourth quarter of 2025.
• Distribution services revenues decreased $88 million in the first three months of 2026 compared with the same period of 2025 primarily due to customer restitution and refunds resulting from the Ohio Companies’ PUCO-approved settlement recognized in Q4 2025.
• On February 18, 2026, the PUCO issued an entry on rehearing extending the amortization period for recovery of deferred storm restoration costs from five years to twenty-five years, subject to prudency review, and clarified the authorized increase in Rider DCR revenue caps is $14 million, subject to meeting reliability standards; revised final tariffs were approved effective March 1, 2026.
• On May 31, 2024 the Ohio Companies filed applications for base distribution rate increases based on a 2024 test year, and on November 19, 2025 the PUCO issued an order approving a net increase in base distribution revenues of approximately $34 million with a return on equity of 9.63% and a hypothetical capital structure of 48.8% debt and 51.2% equity for all three Ohio Companies.
• On May 15, 2025 the Ohio Governor signed HB 15 repealing the statute authorizing ESPs in Ohio, effective August 14, 2025, and on December 17, 2025 the PUCO dismissed the Ohio Companies’ application for ESP VI due to the repeal.
• On December 18, 2024 the PUCO approved the Ohio Companies’ notice to withdraw ESP V and approved their proposal for returning to ESP IV with modifications, and ESP IV as modified continues the DCR rider with an annual revenue cap of $390 million.

Impact estimates