OHIO Official: Deregulation of electric is working

With the highest prices in the state, FirstEnergy has the most customers switching to other suppliers.
COLUMBUS (AP) -- Electric utility customers in most of Ohio are enjoying low prices on the second anniversary of a law that promised choice for consumers, even if competition has been absent or slow to develop, the state's chief regulator said Thursday.
Gov. Bob Taft signed a sweeping deregulation bill in July 1999 to bring competition to the state's $11 billion electric power industry. After the Public Utilities Commission of Ohio determined the rules, the plan went into effect Jan. 1, 2001.
Each of Ohio's eight investor-owned electric utilities was given three to five years to prepare for an open market. Dayton Power & amp; Light, with 447,000 residential customers, will be the first to leave its market transition at the end of this year.
Once the period ends, a rate freeze in place since 2001 also ends.
Switch is off
The law expects each utility to have 20 percent of its customers getting power from other providers at the end of the transition period. Not a single residential consumer, however, has switched from DP & amp;L.
The reason is simple, PUCO Chairman Alan Schriber said: "They've got cheap electricity. We don't apologize for low prices."
Since the summer of 1999, when a hot streak and a shortage of power shot the wholesale price of electricity to record highs, the state has added generation capacity and the weather has been more mild, keeping electricity plentiful and prices low. Also, the demand among industrial and commercial customers isn't high, Schriber said.
FirstEnergy
Companies are competing in areas served by FirstEnergy Corp.'s three utilities: Cleveland Electric Illuminating, Akron-based Ohio Edison and Toledo Edison. Those three utilities have a total of 1.8 million residential customers.
They also have the highest rates in the state because of FirstEnergy's debt associated with the operation of the Davis-Besse and Perry nuclear power plants.
Many FirstEnergy communities have pooled their demands and buy electricity from suppliers in bulk. The largest of those pools is the Northeast Ohio Public Energy Council, a group of about 100 communities with 600,000 customers, which buys its power from Texas-based Green Mountain Energy.
Sixty-four percent of CEI's customers have switched suppliers. The switching rates for Toledo Edison and Ohio Edison are 44 percent and 29 percent, respectively.
What to expect
With prices so low in other areas, Schriber said there's no reason to believe that rates will soar once the freeze is lifted.
Ohio Consumers' Counsel Robert Tongren is not so sure. He is concerned about the absence of competition, especially in the DP & amp;L area. Tongren's office, along with industrial users and municipal electric companies, have asked the PUCO to extend DP & amp;L's market development period by two years until the end of 2005.
He said regulators and others need to figure out how to promote competition in areas where companies may not be able to sell energy cheaper than the local utility. He also said "safety nets" must be built to protect customers who choose not to switch when the rate freeze ends.