2008-04-30 / News

TE Rate Hike Waiting For PUCO Action

by David Pugh Buckeye Staff Writer

The Public Utilities Commission of Ohio is considering a rate hike for the distribution of electricity that could drive up an average electric bill by $9 per month.

Mark Durbin, spokesman for First Energy, the Toledo Edison parent company, said last week the company had applied for a 9% increase in the distribution portion of electric bills.

The distribution portion covers the expense of getting electric power to consumers. It includes things like poles, wires, and transformers.

That portion of the bill has not changed since 1996, Durbin said.

"The price of that portion has gone up by 30%," he said.

As examples, Durbin said the cost of copper wire has skyrocketed, and TE pays the same to fuel its services as everyone else does.

Currently, the average customer uses about 750 kilowatt hours, or kwh, of electricity, per month. That current bill is $91.

With the increase, Durbin said the average bill will increase $9.

Not Justified

Ryan Lippe, spokesman for the Ohio Consumers Counsel that represents consumers in utility rate cases, said OCC believes the request is not justified.

Lippe said First Energy asked the PUCO to grant rate hikes that will generate $340 million in additional revenue.

But OCC experts figured most of the First Energy companies didn't need a distribution rate hike; but, a small increase could be granted for TE.

Lippe said the PUCO staff was recommending $161 million to $181 million in rate hikes.

The OCC could only justify about $24 million in rate hikes.

In fact, OCC called for a rate decrease for some First Energy companies, and a small increase for Toledo Edison.

Matt Butler, spokesman for PUCO, said a series of hearings was held on the First Energy request, including a public hearing in Wauseon.

Now the utility commission is reviewing the testimony, and will render a decision.

It is not known when the fivemember commission will act on the First Energy request.

Deregulation

In the meantime, the Ohio legislature has been taking action to hold the line on electric rate increases, as the rate-stabilization period following the enactment of electricity deregulation comes closer to expiring.

Ohio passed electric deregulation in the 1990s. The idea was that several companies would begin generating electricity in the state, and consumers could pick and choose between suppliers.

But the open market never developed.

Other states that followed a similar plan saw electric rates jump dramatically when the stabilization period ended.

The Ohio legislature has been debating what to do about the issue for some months, and on Tuesday, April 22, the Ohio House passed Senate Bill 221, the state energy plan.

Bruce Goodwin (R-Defiance), said the bill won't lower electric rates, but it will keep them from spiking.

Goodwin said the bill allows companies to go to market rates, but provides incentives to provide an electric security plan.

It also includes requirements for energy efficiency, and the production of energy from renewable resources (solar, wind) by 2025.

The bill has gone back to the senate for final approval.

"It's been a contentious issue," Goodwin said.

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