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Bruce J. Weston named Consumers' Counsel

The Governing Board of the Office of the Ohio Consumers' Counsel announced on March 20 that Bruce J. Weston has been selected to serve as the fourth Consumers' Counsel in the agency's 35-year history. Weston had been serving as the Interim Consumers' Counsel at OCC since October 2011.

The OCC is the legal advocate for residential utility consumers in matters before the Public Utilities Commission of Ohio, courts in the state of Ohio and before various federal regulatory agencies.

"The OCC Governing Board's goal has been to hire the next Consumers' Counsel to lead the agency in its mission and to find creative solutions to the challenges for residential consumers in a changing utility industry," said John Moliterno, chairman of the OCC Governing Board. "Bruce Weston has demonstrated that he has the knowledge, experience and skills to lead the agency in this position that is important to all of Ohio's residential utility consumers.

Weston began his legal career with the OCC more than three decades ago before leaving the agency to work in a private legal practice. He rejoined the OCC as Deputy Consumers' Counsel and legal director in 2004. He has extensive experience in utility law and management at OCC.

He is a graduate of The Ohio State University College of Law and holds a bachelor's degree in business administration (accounting) from the University of Cincinnati. He is a member of the Ohio Bar and is chair of the Public Utilities Law Committee for the Ohio State Bar Association.

"I am grateful to the Board for this continued opportunity to serve Ohio's residential utility consumers," said Weston. "OCC's vision is for utility services that are affordable and reliable for Ohioans, and I look forward to working with all involved on these issues."

Weston's annual compensation will be $128,689 -- the same salary he was paid as the deputy director of the Consumers' Counsel. He is staying at this current salary at his request. Weston was named from 34 applicants of whom six were offered interviews by the Governing Board. The Consumers' Counsel is appointed by and reports to the nine-member Governing Board. Weston will oversee all agency activities; manage a 42-person staff with an annual operating budget of approximately $5.6 million (reduced to $4.1 million in July 2012).

By Beth Gianforcaro

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AEP Ohio rates rejected by PUCO, future customer bills return to December rates

It has been quite the whirlwind for American Electric Power Ohio (AEP) customers these past few months.

First, AEP received December approval from the Public Utilities Commission of Ohio (PUCO) to increase some of its rates at the start of this year. As customers began to get their bills, some noticed huge increases despite steady or lower usage from a year ago. The complaints started to pour into the PUCO from small business customers and others. This prompted the PUCO to revisit its December decision. And in an unexpected move, the PUCO revoked that decision which set rates based on an agreement reached between AEP and others. The OCC opposed the agreement that would have established rates for 2012 to mid-2015.

So where does the PUCO's decision leave consumers? AEP was ordered to file revised rates that are effective in March after the PUCO approved them with some exceptions. Bills sent to consumers after March 9 are expected to reflect these revised rates. Residential customers should refer to their December 2011 bills to estimate the similar levels their bills should return to.

These rates will be in effect until the PUCO approves a different plan for AEP's rates going forward.

AEP filed a modified rate plan March 30 from what it originally proposed in January 2011. AEP also has asked for a quickened timeline for the PUCO to review this modified plan. The PUCO set a schedule that could take the case into July before a decision is made. Whatever does happen, consumers can be assured the OCC will continue to advocate for their best interests as it has from the beginning of this case.

In fact, the OCC has already asked the PUCO to reject two AEP proposals related to revised rates it wanted to charge. One charge was included by AEP in its revised rates before it was approved by the PUCO and should be removed, the OCC said. Another charge would significantly increase the costs AEP charges competitive generation suppliers, which could harm competition that may provide Ohio customers with lower generation rates.

The PUCO addressed both of the OCC's concerns in a March 8 decision. The state regulator ordered AEP to remove the charge that had not been approved and allowed interim rates AEP can charge competitive suppliers through May.

This interim rate allows AEP to charge $110 per megawatt-day for the first 21 percent of residential customers who switch to a competitive supplier. Any additional switching will be based on a much higher $255 per megawatt-day rate. There is, however, an exception created for communities that use governmental aggregation. Suppliers that serve governmental aggregation communities will not be subjected to the higher charge.

The OCC will continue to advocate that residential consumers should only pay fair and reasonable rates. Formal comments and recommendations to protect residential customers will be filed May 4.

By Anthony Rodriguez

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All Ohioans to benefit from low natural gas prices

An unusually mild winter, combined with abundant natural gas supplies and favorable auctions, has resulted in residential consumers paying lower natural gas bills than they have seen in 10 years.

Three of the state's four largest investor-owned natural gas utilities, Columbia Gas of Ohio, Dominion East Ohio and Vectren Energy Delivery of Ohio, recently held auctions to determine the costs they would add to the wholesale cost of natural gas for the next year. The results each provided lower final bids than the previous year. Representatives from the Office of the Ohio Consumers' Counsel (OCC) monitored each auction and the Public Utilities Commission of Ohio approved the results.

The low bid for each of the three auctions established adders to the monthly wholesale price of natural gas. The price of natural gas makes up about 60 percent of the customers' monthly bill.

Since the auctions were first established in 2009, the increased competition has led to steadily lower prices for customers. The OCC offers fact sheets for Columbia, Dominion and Vectren explaining the auction process and natural gas pricing structures. The fact sheets are available on the OCC website, www.pickocc.org.

Columbia
The Columbia auction, held in early February, resulted in a decrease of about $29.75 per year for customers who have an average annual usage of 850 cubic feet (Ccf) of natural gas. The low bid was 15.3 cents per Ccf, a decrease of 3.5 cents from the amount established in a similar auction held in 2011.

It was the first time Columbia held a retail auction to determine the retail price adder of its natural gas supply. In a retail auction, independent natural gas suppliers compete to supply utility customers and have their names listed on the monthly bills to customers. The adder represents the suppliers' non-gas costs of doing business.

Dominion
Dominion East Ohio held its retail auction at the end of February, establishing a new adder of 60 cents per thousand cubic feet (Mcf) of natural gas. A typical residential customer will save almost $40 per year based on an average annual usage of 99.1 Mcf.

Vectren
The Vectren auction, held in late January, resulted in an adder of $1.05 per Ccf, representing a cost decrease for customers of about $23 per year, based on an average annual usage of 770 Ccf. It was the third retail auction held by the utility.

In addition to the positive auction results, Columbia recently notified nearly 250,000 customers on its budget billing plan of a 35 percent decrease in their monthly payments. The budget plan divides projected heating costs for the whole year into 12 equal payments. The decrease was attributed to the warmer-than-average winter temperatures, when usage levels were far below normal.

Independent suppliers also are lowering many of their variable and short-term (one year or less) fixed rates. Weekly comparison charts for each of the major utilities can be found on the OCC website listing prices, contract, and contact information for many of the suppliers doing business in Ohio.

It is hard to estimate how long natural gas prices will stay at current levels, but most long-range forecasts indicate that lower rates will be with us for awhile. That is good news for utility customers still faced with an economically uncertain climate.

By Marty Berkowitz

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New telecom legislation passes Senate

Customers may face higher prices, lower service quality

Some traditional local telephone companies would be allowed to stop providing basic telephone service to their customers under proposed legislation that passed the Ohio Senate in February. The bill is currently under consideration by the Ohio House of Representatives.

Basic local telephone service (or BLES) is the simplest form of telephone service available and allows customers to make and receive unlimited local calls at a flat, monthly rate.

Under current law, local telephone companies are required to provide consumers, at a minimum, access to affordable and reliable basic local telephone service. The requirement for a telephone company to make basic telephone service available to all customers in its service territory is called the "carrier-of-last-resort" (or COLR) obligation.

The proposed bill, Substitute Senate Bill 271 (SB 271), also would allow companies designated as "fully competitive" to exempt themselves from the minimum service quality standards that apply to basic telephone service. To be considered fully competitive, companies need to only show that two other telecommunications companies provide service somewhere, but not necessarily everywhere, in each of their exchanges.

The Office of the Ohio Consumers' Counsel (OCC) is concerned that allowing telephone companies to withdraw their basic telephone service could:

• Leave some Ohioans without access to affordable or reliable telephone options;
• Force customers who want only basic service to switch to more expensive services that contain add-ons the customers do not want or need;
• Jeopardize customers' access to 9-1-1 emergency services by depending on telecommunications services that may not work when the power goes out; and
• Allow telephone companies to drop their service in remote communities where the service may be less profitable.

The legislation allows the PUCO to establish a process to identify an alternative provider for customers where basic telephone service is no longer available; however its authority to do so is limited. Under SB 271, the PUCO may not require any telephone company to serve any particular customer or group of customers. There also is no guarantee that the alternative would be available at comparable rates or features (like unlimited local calling).

For additional information about the proposed legislation, the OCC has developed a fact sheet, available at www.pickocc.org. Consumers can contact their state legislators with questions or concerns about SB 271, either by calling 1-800-282-0253 or by searching online at www.house.state.oh.us.

By Marty Berkowitz

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New financing tool can help lower costs to electric customers

A new law goes into effect this month that could reduce the costs customers have to pay for certain electric utility assets. The law provides electric utilities with a financing tool, called securitization, which allows them to use less costly bonds rather than loans or other financing to pay for certain utility costs.

The Office of the Ohio Consumers' Counsel (OCC), in testimony last November, recommended improvements to the bill toward ensuring that residential customers would experience more cost savings from securitization.

Legislators made several amendments to the bill which included the OCC's recommendations to require cost savings. The law requires the Public Utilities Commission of Ohio to ensure securitization results in both measurably enhanced cost savings and mitigated rate impacts to consumers. This requirement will help achieve savings for Ohio consumers that would not be possible under traditional means to finance utility assets.

The Ohio Legislature passed Amended Substitute House Bill 364 and Gov. John Kasich signed it into law in December. The law officially went into effect on March 22.

By Anthony Rodriguez

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Privacy standards a necessity for smart grid

For the past few years, American Electric Power, Duke Energy and FirstEnergy all have been taking steps to replace their aging electric infrastructures by installing improvements to make their grids smarter. Each utility has launched pilot programs to test how the smart grid functions in their territories.

So what is the smart grid? Simply, it's a complete overhaul of electric transmission and distribution systems with 21st century technology. To learn more, read the OCC's "An Introduction to Smart Grid" fact sheet.

As these improvements are being made to the electric grid in Ohio and around the United States, privacy issues, and how they will be handled, are often raised as more conversations are had about the smart grid. It is a valid concern consumers have and one that should be addressed as digital technology is incorporated to create a smarter and more reliable grid.

For more than a year, the OCC has worked with regulators at the federal and state levels to help develop privacy standards for the smart grid.

These important standards must be carefully developed to ensure all consumers have proper smart grid privacy and data access standards in place that can be relied on to protect them.

The OCC has raised several issues and is advocating they be addressed to create the best standards that protect consumer privacy. These recommendations include:

• What information is necessary and appropriate to be disclosed and how;
• How increased energy usage data will be collected, controlled, managed, and distributed, and who can obtain access to it;
• The ability of customers, particularly those in at-risk, vulnerable populations, to understand, manage, and control the privacy of their energy usage information; and
• Government/law enforcement surveillance and the protection of customers' right to privacy.

In addition, the OCC has recommended formal proceedings be held, rules be created for privacy standards, working groups be used to discuss, analyze and propose solutions to privacy and data access issues, and public workshops be held by the Public Utilities Commission of Ohio to gather any input on privacy concerns from interested Ohioans.

The White House administration also has introduced a consumer privacy bill of rights in February that would protect individual privacy rights and give consumers control of how their information is handled. The blueprint would apply seven principles about how personal data should be handled and would provide:

• Individual control over what personal data an organization may collect from consumers, and how it is used;
• Transparency that allows consumers to easily understand information about privacy and security practices;
• Respect for the context in which consumers provide data;
• Security and responsibility in the way companies handle personal data;
• Access to personal data in usable format and an ability to correct errors;
• Reasonable limits on the personal data that companies collect and retain; and
• Accountability as to how companies handle personal data.

President Barack Obama has asked Congress to pass legislation that would make the consumer privacy bill of rights law.

At the state level, the OCC has recommended formal proceedings be held, rules be created for privacy standards, working groups be used to discuss, analyze and propose solutions to privacy and data access issues, and public workshops be held by the Public Utilities Commission of Ohio to gather any input on privacy concerns from interested Ohioans.

Addressing privacy is an important piece to upgrading the electric grid. As Ohio and the United States move forward to enact standards to protect the private information of electric consumers, the OCC will continue to advocate for the best outcomes for Ohio's residential consumers. Consumers must be the owners of their electric data and they must be assured that data is secure from theft or spying from unwanted eyes. Protection of privacy will allow Ohio to progress with a smart grid that will benefit the people and the economy for years to come.

By Anthony Rodriguez

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