Office of the Ohio Consumers' Counsel

Media Center

Consumers' Counsel challenging FirstEnergy rate plan at Ohio Supreme Court

Columbus, Ohio - October 1, 2004 - A FirstEnergy rate plan modified and approved by the Public Utilities Commission of Ohio (PUCO) violates the law and should be overturned by the state's highest court, the Office of the Ohio Consumers' Counsel (OCC), the residential utility advocate, said. Later today, the OCC will file its appeal at the Ohio Supreme Court, challenging the PUCO's June 9 order approving the plan.

The rate plan establishes the initial electric rates consumers would pay beginning in 2006 if the results of an upcoming auction among competitive suppliers are not accepted by the PUCO.

"Under the plan, residential consumers could see significant price increases on top of the highest rates in the state they currently pay," said Janine Migden-Ostrander, Consumers' Counsel. "It is our responsibility to challenge this plan at the Ohio Supreme Court and protect the interests of households across northern Ohio. We believe that the rate plan violates Ohio's electric choice law, continues transition charges that are supposed to end and fails to protect residential consumers."

The OCC believes the PUCO order harms residential consumers and violates the law by:

Imposing a rate plan on customers that is not part of the electric choice law. The law mandates that consumers be provided a market-based electricity offer by FirstEnergy and the option to purchase their electricity based on the results of a competitive bid. The PUCO approved rate plan does not provide both options and therefore is unlawful.
Allowing FirstEnergy to impose an unjustified and excessive "rate stabilization charge" through 2008. This charge equals the amount of the current generation transition charge which, by law, must end no later than December 31, 2005. The OCC believes allowing this fee unlawfully extends the collection of the generation transition charge by three years, costing residential consumers as much as $20 per month (as much as $720 over three years) more than they otherwise would pay.
Forcing some customers who have chosen an alternative supplier to also pay a portion of FirstEnergy's generation charges. Under the rate plan, there is the strong likelihood that customers who have chosen an alternative electric supplier or live in an aggregated community still may be required to pay all or part of the rate stabilization charge, which is a generation charge. The OCC believes that any customer who no longer receives generation service from FirstEnergy should not be required to pay for any portion of the rate stabilization charge.
Ordering that certain interest charges be collected from customers in violation of a current transition plan agreement approved by the PUCO in 2000. The PUCO provided for the recovery of these interest charges by extending the time in which the company collects regulatory transition charges from customers. The OCC believes that the PUCO has unlawfully modified the agreement approved in 2000 by extending the agreed-upon termination date for the regulatory transition charge.

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.