FirstEnergy's Historic Rate Case: The "Double Squeeze" on Ohio Energy Budgets
Pending approval from the Public Utilities Commission of Ohio (PUCO), FirstEnergy\'s broad operating companies (Ohio Edison, The Illuminating Company, and Toledo Edison) are seeking a massive base distribution rate increase. Commercial and industrial facilities are projected to see delivery/distribution line items increase by 8% to 14%. This regulatory hike compounds with the separate, competitive PJM wholesale capacity spike, creating a severe operational cost squeeze for Ohio businesses in 2026 and 2027.
Executive Impact (Ohio Market)
- →Non-Shoppable Increases: Because this is a distribution-level rate case targeting poles and wires, these increases are "non-shoppable." They apply to the utility side of the bill regardless of which retail supplier you contract with.
- →The "Double Squeeze": While the utility hikes the regulated delivery side, PJM constraint forces up the deregulated generation supply side. Total budget impacts are multiplicative.
- →Mitigation Window: Locking in a long-term fixed-price generation contract now serves to stabilize at least 60% of the total monthly bill against PJM volatility, allowing CFOs to absorb the unavoidable PUCO distribution hikes smoothly.
Understanding the Split Bill
In a deregulated state like Ohio, a commercial electricity bill is split into two primary components: Supply (generation) and Delivery (distribution). You can shop for the Supply, but the Delivery is a monopoly controlled by the local utility (like FirstEnergy or AEP).
When the incumbent utilities need to upgrade physical infrastructure (transformers, smart meters, substation hardiness against severe weather), they file a formal request with the PUCO to raise the rates they charge to deliver power.
The FirstEnergy PUCO Filing
FirstEnergy's Ohio operating companies are pushing through their most aggressive base distribution rate request in recent memory. Driven by inflation in raw materials (copper, steel) and an aging grid attempting to support massive new data center loads in the state, the capital expenditure requirements are vast.
For a typical manufacturing plant or large distribution center, these un-shoppable delivery charges are expected to rise between 8% and 14% once final PUCO approvals are fully phased in.
Compounding the Problem: The PJM Squeeze
This regulatory delivery increase hits at the exact same moment the free market (the Supply side) is experiencing a historic shock. The PJM Interconnection, the grid operator for Ohio and surrounding states, recently saw capacity auction prices clear at a record $333.44/MW-day for the 2027 delivery year.
Commercial buyers in Ohio are caught in a pincer maneuver:
1. Regulated side goes up due to infrastructure rate cases.
2. Deregulated side goes up due to wholesale capacity shortages.
Strategic Response
Because you cannot shop around to avoid FirstEnergy\'s distribution charges, the only financial lever remaining is hyper-optimization of the Supply block. Facilities should aggressively evaluate Peak Load Contribution (PLC) curtailment strategies to minimize their capacity tags, and procure fixed-rate retail supply blocks before the 2027 PJM market tightening fully bakes into retail supplier risk premiums.
Source: Public Utilities Commission of Ohio (PUCO) Docket Data.
Protect Your Operating Budget
Offset unavoidable utility distribution hikes by securing a competitive, capacity-optimized retail supply block in Ohio.