City's electric rates to stay high

Deregulation of electricity hasn't worked in Ohio, an AMP-Ohio official said.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
NILES -- The city's wholesale electric supplier says rates will remain high this year and an effort is being made to minimize costs in the long term.
City council received the update before its Wednesday meeting from Patrick W. Frazier, vice president of energy operations and power generation with American Municipal Power-Ohio, or AMP-Ohio.
The nonprofit electric-supply group provides wholesale power to its 114 member communities, including Niles, for resale to local customers.
This year, the city has budgeted $24 million to purchase power from AMP-Ohio. In 2005, the city had budgeted $20 million but had to transfer $4.9 million into the electric fund to pay for a wholesale rate increase.
As a result, Mayor Ralph A. Infante imposed a charge of 2.4 cents per kilowatt hour to city customers, or about 30 percent. It was added in the fall to the 7.8 cents already being charged city customers.
Frazier told council there were several reasons for the wholesale cost increase the co-op charged member cities.
They were what he termed a "perfect storm" situation.
Reasons given
Because of deregulation of prices by the state, brokers selling electricity were gouging their customers.
In addition, the hurricane season along the Gulf Coast resulted in an increase cost of natural gas and oil used to generate electricity. Adding to this were increased costs for the price of coal and the price to transport it, and added costs to meet environmental regulations.
Another important factor was a spring flood followed by a summer drought that shut down AMP-Ohio's generation plant in Belleville on the Ohio River. It's one of two generation plants operated by the co-op.
This forced AMP-Ohio to go into the "spot market" and buy power at a much higher cost to supply its members.
Frazier said he doesn't see any decrease in the price of electricity this year, but AMP-Ohio is trying to mitigate any future increase.
The co-op, he said, has entered into long-term contracts with electric suppliers to get a reduced rate by locking into the best price.
AMP-Ohio is looking to use more windmills to generate power, and it is planning to construct a third generation plant in Meigs County in southern Ohio.
During the meeting, council:
Changed the zoning of the former board of education officers at 345 Warren Ave. to allow Robert Godfrey Sr. of Warren to open a toy train retail store.
Authorized the mayor to apply to the Ohio Department of Development for a $556,000 Community Housing Improvement Program grant. The money would be used to improve the city's housing stock.
yovich@vindy.com