Office of the Ohio Consumers' Counsel

Historical Journal

OCC helps shave off $98.2 million in rate increases

The Office of the Ohio Consumers’ Counsel (OCC) helped save customers of Toledo Edison and Cleveland Electric Illuminating $98.2 million as a result of a management performance audit that was completed as part of a settlement agreement. The findings reduced 1991 rate hikes from 6 percent to 2.74 percent for customers of Toledo Edison and 4.35 percent for customers of Cleveland Electric Illuminating.

The savings between the two companies differed because most of the cost-cutting measures came from the Davis-Besse and Perry nuclear power plants in which Toledo Edison had a greater share.

The 12-month management audit, in which the OCC participated, stemmed from a 1989 rate case settlement that said the utilities had to equally share operating and maintenance cost savings uncovered by the audit with customers. The total savings reached nearly $155 million. The audit found savings of $84.7 million in operating and maintenance expenses, $32.2 million in lower capital costs and $37.9 million from one-time sale of excess property and equipment.

Although operating and maintenance savings only reached $84.7 million, negotiations added another $13.5 million in savings from lower capital costs and excess property and equipment.

The settlement also established nuclear plant performance standards, a cap on company earnings, rate breaks and other assistance for low-income customers, and consumer advisory panels.

The utility management audit may have been a national first in which a consumer representative participated daily in the audit process, bringing credibility to the findings and the audit process.

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