Office of the Ohio Consumers' Counsel

Media Center

Consumers' Counsel reacts to approval of higher rates for Dayton Power & Light customers

COLUMBUS, OH - December 28, 2005 corrected version - Approval of a settlement in a Dayton Power & Light case is unlawful and unfair to residential consumers because it changes the original terms of a three-year rate plan set to go into effect in 2006, the Office of the Ohio Consumers' Counsel (OCC) said. The new settlement was opposed by the OCC because it adds a new charge to customers' bills beginning in 2007 and extends the rate plan an additional two years - through 2010 - under even higher rates. The settlement was approved today by the Public Utilities Commission of Ohio (PUCO).

"The settlement is unlawful and unfair to residential consumers because it violates a PUCO-approved rate plan that was negotiated and agreed to by DP&L, the OCC and other parties after intense negotiations," said Janine Migden-Ostrander, Consumers' Counsel. "If we cannot rely on the implementation and enforcement of an agreement reached among parties, then the usefulness of the settlement process is called into question. The new settlement, which was opposed by the residential consumer and low-income groups in the case, provides no upside for customers - only higher rates."

The decision by the PUCO changes the terms of an approved rate plan that was developed in 2003. That plan was supposed to provide relatively stable generation rates through 2008. As previously negotiated, the rate plan allowed a one-time 11 percent increase if DP&L could show that its costs had increased. A 5 percent generation discount provided under Ohio's electric choice law would continue and an additional 2.5 percent reduction would take effect if customers were not - or could not - take advantage of savings by choosing an alternative electric supplier. The discounts will continue under the new settlement, but only through 2008. No discounts will apply in 2009 or 2010.

Beyond the permitted 11 percent increase, the new settlement imposes a 5.4 percent generation rate increase each year from 2007 through 2010 based on a new surcharge. The PUCO's decision ordered that this surcharge not be imposed on customers who purchase generation from an alternative supplier. While the OCC opposed the new charge, it also advocated that if the fee were to be imposed, it should not have to be paid by customers choosing an alternative supplier.

Beginning in 2009, generation rates will increase another 8.1 percent for residential consumers based on the elimination of the residential generation discounts. The OCC testified in the case that customers will pay over $20 million more under the new agreement than under the terms of the original rate plan. This calculation was made based on DP&L's electric market forecast of customer rates during those years.

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.