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Electric security plans set generation rates

Consumers will see higher electric rates as a result of electric security plans, three of which have been approved by the Public Utilities Commission of Ohio (PUCO). While the outcomes varied, the Office of the Ohio Consumers’ Counsel (OCC) was able to successfully advocate for consumer benefits through agreements with three of the four electric utilities.

Each of the plans requested by the utilities included inflated cost estimates, which the OCC fought to reduce to more reasonable levels. The OCC also will have a role in the development of programs that will help the utilities meet state requirements for energy efficiency and renewable energy. As the residential utility consumer advocate, the OCC will continue to look out for the best interests of Ohioans as these plans are implemented.

AEP increases limited in rate plan

At the OCC’s urging, the PUCO modified American Electric Power’s (AEP) electric security plan in March. While the OCC was successful reducing some costs, the overall increase is excessive. The OCC has asked the PUCO to reconsider its decision. The yearly total bill increases approved in both of AEP’s Ohio territories total 25 percent over three years and additional costs will be deferred for recovery in the future. Customers would end up paying an interest rate of about 11 percent on the deferred costs, totaling more than $900 million.

Columbus Southern Power customers’ rates will be capped – based on an average across all customer classes – at 7 percent in 2009, 6 percent in 2010 and 6 percent in 2011. Ohio Power customers’ rates will be capped across all customer classes at 8 percent in 2009, 7 percent in 2010 and 8 percent in 2011. The typical customer using 750 kilowatt-hours will see their bill increase approximately 13 percent, or to $72.34/month for Ohio Power customers and $91.41/month for Columbus Southern Power customers, according to the PUCO.

The PUCO allowed AEP, beginning in April 2009, to collect rate increases for all of 2009 over the the remaining nine months of the calendar year.

The OCC believes this is unlawful and requested the PUCO to halt this portion of the rate increase until the lawfulness of the rates can be decided. The OCC also asked the Supreme Court of Ohio to stop the collection of the retroactive portion of the rate increase.

Other parts of the PUCO-approved AEP plan include:

• A minimum of $15 million over three years in shareholder funds for lowincome programs;

• Energy efficiency programs;

• Smart grid improvements at an estimated cost to customers of $54.5 million – half of what AEP requested;

• $104.5 million for increased vegetation management; and

• Recovery of $152 million annually for an estimated financial risk to AEP to provide electricity if customers shop for alternative suppliers, and then return to AEP. The OCC objected to this cost.

The PUCO also granted the OCC’s request to deny collection of more than $1.6 billion in costs related to market power contracts, non-fuel generation and early plant closures.

FirstEnergy rates to be set in auction

FirstEnergy will be allowed to obtain its generation prices through an auction as a result of a February agreement among the utility, PUCO staff and other parties. The prices established in the generation supply auction will determine the rates customers will pay from June 1, 2009 through May 31, 2011.

The OCC and other Ohio Consumer and Environmental Advocates (OCEA) organizations did not sign the initial agreement in February because proper consumer protections were not included. After additional negotiations, OCEA members signed a supplemental agreement that provided consumer protections and benefits.

In the supplemental agreement, the OCEA obtained better terms for government aggregation, low-income customer payment assistance, a renewable energy credit program and consumer representation in the development of energy efficiency programs.

The improvements for governmental aggregation, which allows local governments to band customers together to buy electricity at a competitive rate, will allow residents in northern Ohio the opportunity to seek generation service at rates lower than those of FirstEnergy.

The OCC also negotiated for a lowincome fuel fund of $6 million that will be made available, over three years, to help consumers who are at or below 200 percent of the federal poverty guidelines.

The renewable energy credit program will be created by June 30, 2009, to make it more affordable for residential customers to take advantage of renewable energy. The details of the program, to be developed in consultation with the OCC and OCEA parties, could include installing solar panels or other renewable energy sources to help FirstEnergy meet its obligations under Ohio’s new electric policy.

Residential customers also will have greater participation and representation in the development of energy efficiency programs such as rebates for Energy Star appliances and discounts for home energy audits. A working group will include OCEA members.

DP&L extends current rates, adds efficiency, grid improvements

The Ohio Consumer and Environmental Advocates (OCEA) – including the OCC – reached an agreement with Dayton Power & Light (DP&L) in February. If approved by the PUCO, the agreement will benefit customers and hold rate increases to reasonable levels.

Under the agreement, DP&L will continue its current rate plan until 2012 and add energy efficiency and renewable energy to its electric portfolio. Additionally, DP&L’s base distribution rates will be frozen through 2012.

The utility will work with a collaborative group – including members of OCEA – to develop an advanced metering infrastructure and smart grid by Sept. 1. If approved, these improvements will provide better service reliability and give customers more opportunities to better control the amounts of electricity they use. DP&L originally proposed costs that more than doubled what these improvements typically cost and underestimated the benefits.

DP&L also will create energy efficiency programs such as rebates for customers purchasing Energy Star appliances and discounts for weatherizing homes. The utility can charge customers a fuel recovery rider in 2010 to recover actual increases it incurs for obtaining fuel or purchasing electricity to serve customers.

DP&L also will develop a renewable energy certificate program that would pay a fee to customers for their renewable energy. This program would help offset the customer’s cost of renewable energy installations.

Agreement holds Duke rate plan to minimal increase

An agreement was reached by the OCC, Duke Energy and other parties that limited increases to residential consumers’ bills. As a part of the agreement, base generation rate increases were limited to 2 percent in 2009 and 2010 and none in 2011. Duke Energy’s original plan would have increased generation rates by at least 5.7 percent over three years.

Other parts of the plan include:

• Low-income assistance – Duke will provide $1.75 million per year in assistance to be distributed by local nonprofits;

• Energy efficiency – Duke will be allowed to earn a limited profit on investments for energy efficiency programs that exceed the state’s mandates;

• Infrastructure improvements – Annual cost caps for Duke’s SmartGrid and automated metering proposals established; and

• Renewable Energy – A standard renewable certificate purchase program was created to promote customer-sited renewable energy and allows Duke to meet state mandates.

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Geothermal system can save money and earn tax credit

One of the things Jack Flurry learned after installing geothermal heating when he built a home near Ostrander, north of Columbus, is not to depend on using well water. It is not that he does not have a plentiful supply to circulate through the heat exchanger in his basement. The water he takes out of one well gets sent back to the aquifer through a second well. Both are about 80 feet deep.

“It’s good water,” Flurry said. It is just that well water tends to have a lot of iron in it and that gums up the works in the exchanger.

Geothermal is an electric-powered system that taps the stored energy of the earth, using its relatively constant temperature to provide heating, cooling and hot water for homes and commercial buildings. Users can save costs on their electric or natural gas bills and geothermal is a renewable source of energy.

Systems use either an open loop, the kind Flurry installed, or closed loop and can be installed horizontally, vertically or in a pond, depending on the available land space, the type of soil and rock and water availability.

He advises people thinking about installing a geothermal system to check records to determine how pure their water is. In addition to researching geothermal before diving in, Flurry recommends using a reputable dealer and understanding that the heat coming from geothermal is more like using a heat pump than a gas or electric furnace.

“Talk to people,” he said. “See it in action.”

Flurry and his wife, Leslie, don’t regret installing a geothermal system, even though they did so before federal tax credits were available. Now, homeowners who install a geothermal system can get a 30 percent tax credit on their total investment through 2016 because of the Energy Improvement and Extension Act of 2008. Business owners can get a 10 percent credit for installing systems at their commercial properties.

“We try to do as much to be energy efficient as we can,” Leslie Flurry said.

“I didn’t want to be beholden to a (fuel) oil or (propane) gas company,” Jack Flurry said. “And we want to do something good for the environment.”

The Flurrys expect to break even on their system, installed in late 2005, in four to five more years.

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Funds to help make gas payments

Natural gas customers served by Columbia Gas of Ohio and Duke Energy who experience difficulty keeping up with their home heating expenses have assistance options available through two funds established by the utilities following agreements with the Office of the Ohio Consumers’ Counsel (OCC) and approved by the Public Utilities Commission of Ohio (PUCO).

Columbia Gas

Approximately $2.1 million in emergency assistance is available for families earning from 175-200 percent of federal poverty guidelines (from $37,500 - $42,400 annually for a family of four) after the OCC and other parties negotiated an agreement with Columbia to use federally awarded interstate pipeline refunds.

Households earning below 175 percent of the poverty guidelines have the ability to apply for assistance through another fund created through an agreement among the OCC, Columbia and other parties. The “rate case fuel fund” will be offered to customers who have exhausted all other assistance programs, such as the Home Energy Assistance Program (HEAP) for the next five winter heating seasons through 2013.

Both funds are administered by local community action agencies which accept applications, determine eligibility and distribute the available money.

Duke Energy

Duke’s “Ohio Residential Low Income Pilot Program” provides assistance to lowincome, low-usage natural gas customers by providing a monthly credit of $4 to up to 10,000 participants who meet the eligibility guidelines. Through March 31, a total of 4,080 customers were enrolled to receive this credit to their monthly bills.

To be eligible for assistance, customers must:

• Use 900 Ccf (hundred cubic feet) or less of natural gas annually; and

• Have an annual income at or below 175 percent of the federal poverty guidelines and not participate in the Percentage of Income Payment Plan (PIPP) program.

Customers with questions about these and other sources of bill payment assistance or inquiries about their utility services should contact the OCC toll free at 1-877-742- 5622 or visit the OCC Web site at www. pickocc.org.

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DP&L customers: Credit reported for late payments

Customers of Dayton Power and Light (DP&L) who are 30 days late paying their electric bills will be reported to Experian, a national credit rating agency, the utility announced in February.

Beginning in April, DP&L started reporting the current account status for all residential customers to Experian. An account that is paid late, or partially, will not be reported delinquent to Experian until the account is 30 days overdue.

Late-paying customers who wish to avoid a delinquency should enter into a payment agreement with DP&L or inquire about a payment assistance program. Customers who make an agreed-upon payment on time will be reported as “current” to Experian.

The Office of the Ohio Consumers’ Counsel (OCC) urges DP&L customers with inquiries about payment assistance programs, their bills or utility services can call the agency hotline toll free at 1-877-742-5622 or visit the OCC Web site at www.pickocc.org.

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