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Schwebel’s Sues FirstEnergy Over Cold-Winter Surcharges

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YOUNGSTOWN, Ohio – Schwebel Baking Co. has sued FirstEnergy Solutions Corp, claiming the utility company breached its contract by improperly passing on extra costs incurred during the unseasonably cold winter of 2014.

In a class action complaint filed Monday in U.S. District Court here, the 111-year old bread manufacturer is demanding a full refund of what it claims Columbus-based FirstEnergy overcharged plus interest, legal and court costs.

The lawsuit also seeks injunctive relief on behalf of Schwebel’s and “all FirstEnergy customers in the region who were wrongfully billed for unlawful surcharges,” court invalidation of the pass-through charges and enjoining FirstEnergy from “taking any steps to collect any unpaid portion of the unlawful surcharges.”

The pleadings do not state how much Schwebel’s claims it was overcharged. Cited is a March 2014 letter from FirstEnergy that stated the utility “anticipate[d] the amount of the charge to be approximately 1-3 percent of your annual electric generation expenditure…”

According to the pleadings, “Only one provision of [Schwebel’s] fixed-rate agreement allowed FirstEnergy to potentially ‘pass through’ an increase in electrical charges to its customers, but that paragraph permitted such ‘pass throughs’ only in certain very limited circumstances.”

The lawsuit recounts how PJM Interconnection LLC — the organization that coordinates the supply and transmission of electricity on a wholesale basis in the Ohio, Illinois, Michigan, Pennsylvania, Maryland and New Jersey — purchased additional electricity generation capacity to meet high heating demand in January 2014.

Schwebel’s argues that an increase in the market price of electricity caused by cold weather “is precisely the type of market fluctuation in price that FirstEnergy customers protected themselves against when they enter into the fixed-price contractural arrangements reflected in [Schwebel’s] agreement.

Among the exhibits attached to the lawsuit is a standard fixed-rate contract drafted by FirstEnergy that is offered to its commercial customers.

As of this posting, FirstEnergy has not replied to the lawsuit. The case has been assigned to U.S. Judge Benita Y. Pearson.

Published by The Business Journal, Youngstown, Ohio.