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Consumers' Counsel: Decision on FirstEnergy rate plan responded to consumer opposition

OCC, consumer group efforts made a difference

Columbus, Ohio - June 9, 2004 - Today, the Office of the Ohio Consumers' Counsel (OCC) was pleased that the Public Utilities Commission of Ohio (PUCO) announced that an auction will be used to achieve the lowest possible electric prices for consumers in northern Ohio. If the auction does not produce lower rates, a modified rate plan approved by the PUCO would go into effect. The PUCO-approved plan makes some improvements to the proposal submitted by FirstEnergy and vigorously opposed to by the OCC.

"A groundswell of opposition by consumers across northern Ohio and the solid arguments made by our office and numerous other groups have made a difference and resulted in significant changes from what FirstEnergy had proposed," said Janine Migden-Ostrander, Consumers' Counsel. "I am pleased that the PUCO has approved a competitive auction, which could give consumers across northern Ohio the benefit of lower electric rates. I support attempts to bring lower rates to areas that have paid high prices for long enough."

Migden-Ostrander noted that over 500 consumers and several other consumer groups have voiced their opposition to the PUCO.

According to the OCC, changes made to FirstEnergy's proposal include:

• Requiring an auction among suppliers that could potentially lead to lower electric rates. In an auction, when companies compete to provide energy, consumers could benefit.

• Rejecting the ability for FirstEnergy to raise generation rates by as much as 50 percent over three years. Under the PUCO-approved plan, FirstEnergy's generation rates must continue at their current level through 2008, except for increases related to material changes in tax regulations or laws.

• Rejecting FirstEnergy's attempt to violate an existing PUCO-approved agreement to freeze distribution rates through 2007. The existing agreement and a related PUCO order required that distribution rates be frozen. While the company wanted to be able to break the freeze if it spent money to "improve reliability of service," the PUCO has held FirstEnergy to the existing freeze through 2007.

"We opposed FirstEnergy's plan because it violated the law and breached an existing PUCO-approved agreement," said Migden-Ostrander. "I am pleased that the PUCO's decision established a competitive bidding process and made significant changes to FirstEnergy's proposal. Consumers should be proud to have made a difference in this proceeding.

"We believe that the proposed rate stabilization plan should have been rejected as it could have led to higher rates; however, we are encouraged by the PUCO's rejection of certain cost increases contained in the plan."

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at www.pickocc.org.