FirstEnergy predicts higher electric bills

Gov. Strickland says that alternative fuels are necessary for a steady power supply.

COLUMBUS (AP) — Electric bills are going up and will increase even more if lawmakers approve the governor’s plan for more renewable and advanced sources of energy, an executive at the FirstEnergy utility company said Thursday.

Rates have remained stable since a major reorganization of the industry in 2001, but business costs have soared, said Anthony Alexander, FirstEnergy’s president and CEO, during a meeting with reporters before testifying at a Senate committee hearing on Gov. Ted Strickland’s plan.

The cost of labor, coal, transmission wires, plant maintenance and other industry staples has gone up, while utilities’ revenue has remained stable under regulation, since the state tried to enter a competitive market in 2006, Alexander said. Competition hasn’t developed, so regulators have essentially extended the fixed-price market until 2009 for Akron-based FirstEnergy and two other investor-owned utilities.

Strickland’s plan would require utilities to tap renewable energy sources, such as solar and wind power, and other sources, such as clean coal and nuclear, for 25 percent of their total power load by 2025.

Half of that 25 percent must be renewable sources, under the plan. Ohio’s spotty wind and sunshine could require utilities to search for other renewable sources and that would drive prices up further, Alexander said.

“Under any scenario you go with, rates are going to increase,” Alexander said.

What governor says

Strickland argues that turning to alternative fuels is essential to ensuring that Ohioans have a steady power supply and attracting new jobs to the state.

Estimates of the cost increases are exaggerated and would be offset by energy savings and the construction and manufacturing jobs that advanced energy production would bring to the state, Strickland spokesman Keith Dailey said.

“Electric prices will be more stable and predictable,” Dailey said. “If Ohio doesn’t take this action now, other states will continue to pursue these advancements.”

Eighteen states currently have renewable energy goals, most lower than Strickland’s.

FirstEnergy, with more than 2 million customers in northern Ohio, has the highest energy prices in the state, mostly because of costs associated with its Davis-Besse and Perry nuclear power plants. However, its aging coal-fired plants must be replaced or upgraded and Strickland’s plan doesn’t predict how the costs will be covered, Alexander said.

“If it’s clear what the path to the future is, there will be investments,” Alexander said. “Under this bill, I don’t think there’s any clarity at all.”