FIRST ENERGY REACHES TO ITS CUSTOMERS IN SERVICE AND ASSISTANCE - PART 1

The Call and Post was given the opportunity to hear from and share with Chuck Jones, Jr., the CEO of First Energy. Mr. Jones has been the leader of First Energy in this time of verbal energy discussions. In regards to what is best for our communities, in comparison to many of the issues, which plague the African American and deprived communities in Cleveland and Cuyahoga County. The following is a heart-to- heart revelation of the future acts and vision as it pertains to energy growth, energy transformation and the aid given to a community that has been neglected and overlooked in the past. We thank Mr. Chuck Jones, Ms. Lorna Wisham and Mr. Doug Colafella for their time, input and earnestness and speaking to the Call and Post community. On Thursday, November 7, 2019, we conducted this interview.

Mr. Jones, Thank you for allowing us to be with you today. Cuyahoga County was awakened this morning to the news of a major transformer being escorted through the streets moving at 3 miles per hour. I believe it is a testament to your growth and productivity in Cleveland with First Energy. What do you see as the vision of First Energy as we move further into the 21st Century?

Chuck Jones: We’re transitioning as a company and have pivoted as a company which does power generators as a major part of our business to a company which serves its customers to more affordable and clean energy and the transmission and distribution side of the business. It is a big change because it puts us in a place where it puts us in a position to what you described as looking at the investment of our business. We have put over three billion dollars a year in infrastructure around our five state footprint. Modernizing the system: It was old and built in the 1950’s and 60’s right after World War II as we had the growth in our country and the whole industrial revolution moving forward. This system needs a lot of work in order to renovate and improve the system. The customers expect more of it today than they did before. Everything that you do in life today is dependent upon electricity. I have been in this business forty years. The clock in my office at one time was the only thing that a person had in their house. If the power blinked during the day and they came home, they would not have known because the power would come back on and they would continue with their day. Then someone invented these darn alarm clocks. When people came home, the clocks were flashing. Then they invented the digital VCR. That was flashing. That was even worse because they set it to record their programs during the day and then they didn’t get to watch what they wanted to watch when they came home at night. Now power quality is more critical than anything is. Our people have computers and everyone wants their equipment to work efficiently. So, we are approaching our business differently and trying to make the investments necessary to ensure both reliability, which is to keep the lights on today, and resiliency, which is keeping the lights on five years from now.

Q: Is fossil fuel becoming an extinct entity in our society?

A: I don’t think it is becoming extinct nor do I think that it will ever be extinct. We are in a period of transition. We set a goal of 90% reduction of our carbon footprint by 2045 versus 2005 levels. We accepted that goal three years ago. By the end of this year, we will be over 70% towards that goal. Now the last part in anything that you try to do is the most difficult part. It is going to take us a while but clean power plants, which President Obama was trying to get in place, was done and a 30% reduction will be realized by 2030. We are at 70% reduction in 2019. The transition is happening as more of our country moves away from coal and moves toward natural gas. Natural gas breathes half of the CO2 on a per megawatt basis as coal. It is still a fossil fuel. It is just a different form of fossil fuel. I think that it will be a long time before we fully get away from the use of fossil fuels. I believe that what the State of Ohio did to preserve the two nuclear plants, which no longer belong to First Energy and have no impact on First Energy whatsoever, was a good move to make for a couple of reasons. 1. Preserves the fact that these are zero emitting plants. Had they closed they would have been replaced with gas plants. Gas plants produce carbon. Nuclear plants do not produce carbon. There are 2000 megawatts between the two plants. That is a lot of new CO2. Keeping them plants running helped in that area. 2. The cost to run nuclear plants is steady and relatively low. It will be a hedge for customers as it pertains to future prices. Eventually, natural gas costs will not stay where they are right now. We’re building 31 billon dollars of pipeline to get it out of our region. We’re building liquefied natural gas terminals to ship it to the rest of the world. When that infrastructure gets built and that price goes up the cost to customers is going to go up. We spoke about it in staff meeting and discussed that though we are no longer in the generation business, when the bill shows up at a customer’s house and has the delivery charge and the generation charge separate on the bill it is still coming on a bill that says Cleveland Electric illuminating. Most customers will not understand the difference. So when the generation fees start to increase our customers are going to start calling us asking why their bills so high. In actuality we are doing all that we can to keep the bills of our customers as low as possible and reducing them. I do not think fossil fuel will completely go away. I do believe that we will see a transition more and more away from coal.

Q: What programs are benefitting customers, which First Energy has at this time?

A: We have a number of programs. We have 6-10 programs from weatherization to financial assistance. Educational programs and Foundational programs are also lucrative. Our Foundational Programs have 124 million dollars in them. Three years ago it was about 38 million dollars. We put around 90 million dollars into that foundation. Ms. Lorna Wisham has the toughest job in the company. These funds are used to help our communities. Ms. Wisham is given parameters and she investigates and has to say “no” to most who request funds. There is so great a need in the community. Issues like the Cleveland Rising Summit, if she finds a way to help that venture it means that there is money that is not going somewhere else. Even though it is over 120 million dollars, she is allowed to spend so much each year. We were in a mode where we were spending more than the foundation earned and it was depleting the resources of the foundation. The money that it earned could not allow us to do the work that we wanted to do. One of the commitments that I made in coming to the office of CEO was mandating that we get the funds back to a level where we can distribute 6-7 million a year. All of the funds are invested. Ms. Wisham has a separate investor and advisor who make recomendations for the best places to invest the resources. If it grows then she can give away more. The idea was to ensure that every year that the amount being given is not questioned because we are not investing or giving our money wisely. It helps Tri-C, Red Cross, and many organizations in Cleveland and across Cuyahoga County. Ms. Wisham can give you more detail.

Lorna Wisham: It is exactly what Mr. Jones has stated. There are 5 priority areas. It is designed to help the community overall, namely, to improve the vibrancy and the sustainability of the communities which we serve. It is designed to support communities, which support First Energy’s entire corporate footprint. From Ohio to New Jersey and West Virginia is where the Foundation is asked for assistance and we try to make an impression wherever possible as we see the need. We give away about 7-8 million dollars a year. They are largely in grants that are aiding in supporting the health and vitality of our communities such as United Way. There is a huge employee campaign of support for efforts like Harvest for Hunger. Our employees support our efforts in record-breaking levels. They are incredibly generous. We have a matching gift program. If you make a gift to a 501(c)3 First Energy will match it. It is incredible to see the growth of the foundation from the assets of increased investments. For the last few years because of the foundation efforts, we would not be able to support the efforts of an institution like Tri-C, Cleveland Clergy and the Alzheimer’s Association without the benefits of generosity of the investment of First Energy to the foundation purposes. We supported the efforts of the Tri-C Issue 3 levy and we are thankful that it passed.

Mr. Jones: My job is to be friendly with everybody. Working with Rev. Caviness’ Clergy Coalition has inspired us to work with them and we have 7-8 children who are working with our lineman program. A young man by the name of Deante James, whose parents and sister were present at a recent fundraiser, was so elated about being in the program to help disadvantaged youth and adults. He will be working in our substation electrical force. We have hired people working in our recovery area. The connection that we received in working with that group has been an inspiration to us. If we can get people to work and get the word of mouth to people, we can benefit those who are desperately in need. One of the Pastors was interested in taking young men to the NFL Hall of Fame in Canton and informed them that it was being done because of First Energy. Speaking to them now and getting them interested in what First Energy has to offer begins to stimulate their thinking on what could be possible for the future. There are young people graduating from high school in Cleveland who may have a child or two by graduation time. Through First Energy programs, he can go to college and begin to make a life for himself and for his children if he desires and follows the plan, which is before him. We want to be able to help boys and girls take care of their families. Any way that we can reach out and help our young people I believe that First Energy should be doing. I believe that social responsibility is good business for a business such as ours. The more we can do the stronger a company we will be.

Q: Are customers able to take advantage of the solar panel program, which is being promoted through First Energy?

A: The solar panel program is not our program. There are a number of programs that promote these solar rooftop installations. The challenge is that they only sell them to people with good credit ratings: 650 and higher. You don’t see the programs in the City of Cleveland but you see them in the suburbs. When they are installed in the suburbs, it makes the bill of those in the city rise because of the least use of energy in the suburbs. It doesn’t save because First Energy is paid back from the money that it spends. We are paid on a rate of return on investments that we make. If usage declines, it does not affect us. It might affect us in the short term until we get our rates adjusted. We have been asking the commissioners to come up with a way where the house, which receives solar paneling, comes up with a way where the sharing of the cost will affect everyone. The average use of electricity of a First Energy customer is 830-kilowatt hours. The average bill is $120. That average includes me. My wife yells at me about my electric bill. I pay more than $100 a month for landscape lighting. First Energy decided to rollout a landscape lighting to roll out to our customers and I wanted to know how it would affect our customers so I signed up for it first.

If you’re going to say something is good for the customer then you need to try it for yourself first. I was president of utilities so I decided that I should have my house done first. My wife loves it and when we come home, it looks like a resort. When the bill comes home she asks, “Why is this bill so high?” However, when we look at the average, the average includes my house. The average customer when they receive their bill notes that it is $60-70 a month and they can’t afford to pay $100 a month in the City of Cleveland. They have to pay the $60-70 a month because, as I said from the beginning, they cannot afford to live without electricity. Our job is to try and figure out what we have to do and keep those bills where they are now for as long as we can do it. I look at our customers as my parents. My parents were not well to do. They struggled to pay their electric bill until they transitioned. I could have had the bill come to me and put it on an automatic payment but my dad would not have it.

If I bought a gallon of milk on the way to their house there would be $2 sitting on the counter when I arrived. That is how my dad was in his time. Having watched them with their electric bill is how I think about customers. You have to think about them all. I can afford to pay my electric bill even when my wife fusses at me. Those customers that live in deprived areas of Cleveland, rural areas and communities, parts of Pennsylvania and West Virginia deserve our doing our best so that they can maintain and pay their electric bills. Cleveland is the largest metropolitan city that we serve. We also serve Akron, Toledo, and Erie. Our footprints are in all of these cities. Some are our second largest cities but we know that we must do what must be done and that is to serve the customers who depend on and need electricity.