Lower electric rates possible next year

By John Funk

Plain Dealer Reporter

CLEVELAND

There is a good chance electric bills for customers of the Illuminating Co., Ohio Edison and Toledo Edison will fall next summer.

The first of two wholesale auctions to supply power to the three companies from June 1, 2011, through May 31, 2014, has ended with rates lower than what the companies pay today.

The results will be blended with a second wholesale auction planned for January, which probably also will yield low to moderate rates unless the economy significantly improves and demand increases.

The bottom line for consumers? Retail rates of electricity also can be expected to fall in June. (The auctions do not affect delivery rates. Those are set by state regulators.)

CEI, Ohio Edison and Toledo Edison currently pay 5.8 cents per kilowatt-hour plus transmission and other grid-related charges — wholesale rates based on an auction in May 2009.

Residential retail power rates are closer to 7 cents per kilowatt-hour. The total rate per kilowatt-hour, including delivery, is about 11.5 cents per kilowatt-hour.

The new wholesale rates — over three separate years — will run between 5.455 cents and 5.658 cents per kilowatt-hour. Final wholesale retail rates, including transmission and other charges, will add an additional three-tenths of a cent or so.

Ten bidders, including FirstEnergy Solutions (owner of FirstEnergy’s power plants) competed in the complicated, three-part auction conducted over the Internet this week by an independent auctioneer.