Ohio Edison proposal would drop rates, then raise them

By Don Shilling

The electric company said it needs higher rates to cover increased costs.

A new rate proposal would first lower electricity rates for the typical Ohio Edison customer before raising them.

The monthly bill for 750 kilowatt-hours of electricity would drop by 1.3 percent next year but then increase by 3.2 percent in 2010 and 3.8 percent in 2011.

That amounts to a decrease of $1.28 next year and increases of $3.06 in 2010 and $3.67 in 2011. A customer who uses 750 kilowatt-hours now pays $95.66 a month.

The rates are contained in a filing Ohio Edison’s parent company, FirstEnergy Corp., made Thursday with the Public Utilities Commission of Ohio. The state agency will hold hearings and issue a ruling within 150 days.

The filing follows years of debate on how electric rates are set in Ohio. A state energy bill adopted this year tempered the effects of a 1999 deregulation bill that would have allowed utilities to operate in the open market starting next year.

Ellen Raines, a company spokeswoman, said Ohio Edison needs to begin raising rates because it has been operating with the same base electricity rates since 1990.

“We hope this will be viewed as a reasonable request given the fact that our costs have gone up considerably in the past 18 years,” she said.

Natural gas, coal, oil and uranium all are used to fuel power generation plants. Despite increased costs for these fuels, the company has maintained rates by making power plants more efficient, enacting cost-cutting measures and increasing revenues by selling electricity on the open market, Raines said.

The Ohio Consumers’ Counsel, which represents residential users in rate cases, said it would study plans that are filed by the state’s utilities.

FirstEnergy’s proposal is more moderate than one it made earlier this year. That proposal called for an increase in distribution fees that would have raised the typical residential customer’s bill by 6.7 percent.

The PUCO staff recommended that increase by cut in half, so FirstEnergy rolled that rate case into the new one.

The new case actually calls for rates throughout its system to increase an average of 5.3 percent next year, 4 percent in 2010 and 6 percent in 2011. Those increases include all classes of customers and FirstEnergy’s other operating companies in Cleveland and Toledo.

Bills for residential customers of Toledo Edison and Cleveland Electric Illuminating Co. also would decrease next and then rise the following two years, although by different amounts. The plan calls for industrial rates to rise more sharply than residential rates.

While the filing proposes rates for three years, FirstEnergy is seeking authority to increase rates in the future. Its request includes a rate increase of 10 percent that would be spread out over the next 10 years. That increase is included in the rates listed through 2011.

Raines said the deferral was included to avoid the shock of a large rate increase.

shilling@vindy.com