A contract fight is unfolding in Cleveland where industrial power customers were hit with “polar vortex” surcharges ranging from $9,000 to $290,000. When temperatures plummeted last January power demand spiked and some generation plants tripped offline. Grid operator PJM called on all generators to produce more power to stabilize the grid and then billed them for the extra cost associated with running less efficient marginal plants.

In this case, First Energy is seeking to pass those costs on to customers – including Marathon Oil – that have long-term contracts with the power company. The customers argue that under the terms of their contracts they should not have to pay the additional surcharges, but First Energy claims the contracts do allow them to pass on “new administrative charges.”

“We continue to stand behind our decision to exercise the pass-through option which is permitted in these customers’ contracts. We didn’t take this decision lightly but we felt it was necessary following the unprecedented weather and market events that occurred in January.” – FES spokeswoman Diane Francis as reported by Cleveland.com