COLUMBUS Electric utility to levy connection fee, surcharge

The connection fees for new homes and apartments will also apply to FirstEnergy customers.
COLUMBUS (AP) -- American Electric Power Co. said new homeowners soon will be charged a one-time $375 connection fee and an $8 monthly surcharge to obtain service.
People moving into newly built apartments will pay a $4 monthly surcharge under an agreement with utility companies and other parties approved Thursday by the Public Utilities Commission of Ohio.
The agreement, which will take effect by Dec. 1, also applies to FirstEnergy and Monongahela Power customers, with some variations.
The surcharges, in most cases, will wipe out the 5 percent savings on electric bills guaranteed under Ohio's electricity-deregulation law, which took effect Jan. 1, 2001.
"When is a rate freeze not a rate freeze?" asked Ohio Consumers' Counsel Robert Tongren, who refused to sign the agreement.
"It's a huge disappointment for consumers who thought electric restructuring was going to help them out," he said.
It could have been worse.
Disputed charges
In the past year, AEP and other utilities began charging about $1,500 per new hookup to cover the expense of extending service from the pole to individual homes and apartment buildings. Some consumers complained to the PUCO about being charged from $2,000 to $15,000; those excess charges must be refunded.
The new surcharges will continue until the end of the transition period -- Dec. 31, 2007, or Dec. 31, 2008, depending on where customers live.
Tom Hart, executive director of the Building Industry Association, said that although the one-time charges -- $375 for single-family residences and $100 per multifamily unit -- will be paid by builders and developers, property owners will be assessed one way or another.
"We have to pass it along," Hart said. "We're in a business situation."
PUCO Chairman Alan R. Schriber called the connection charges an "unintended consequence" of deregulation.
"This has to do with the cost of building a new house. It has nothing to do with the cost of energy."
Before deregulation, utilities routinely picked up the cost of extending electricity service to new dwellings. It was considered a cost of doing business and was built into base electricity rates.