Office of the Ohio Consumers' Counsel

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Electric

• Electric choice
• Community aggregation
• Affinity aggregation
• Understanding your electric bill
• Meter reading

Electric choice

Electric choice began in Ohio on January 1, 2001 based on a law passed by the state legislature in 1999. The law directly applies to areas served by investor-owned electric companies. Customers of rural electric cooperatives and municipal electric systems can contact their local providers to find out whether their systems will be participating in electric choice.

Where retail competition has developed, consumers have been able to choose the company that generates, or supplies, their electricity. The local electric utility continues to distribute electricity into homes, maintain the poles and wires, read the meters and bill for those services. Ohio’s electric choice legislation provided for a “market development period” during which electric rates are frozen at their 1999 level. This transition period extends through December 31, 2005 for all of the investor-owned electric utilities in the state.

After the market development period ends, the law provides for the lifting of the temporary rate freeze and that the local electric utility provide a standard service offer at a market-based rate to customers who have not chosen an alternative electric supplier. This standard service offer is a generation rate primarily based on the price the utility would pay for electricity in the market, as opposed to the utility’s cost of generating the electricity.

In the first three and one-half years of electric choice, most of the residential consumers who switched to a competitive supplier lived in northern Ohio and were served by one of three FirstEnergy companies (Cleveland Electric Illuminating, Ohio Edison and Toledo Edison). Residential customers in Central and Southern Ohio had virtually no choice of alternative suppliers.

As Ohio continues through its market development period, much work remains to be done if electric competition is to give residential consumers what they deserve – meaningful choices and the opportunity for cost savings.

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Community aggregation

Ohio’s electric choice law allows local governments to group together their residents to purchase electricity. When buying large blocks of energy, aggregated groups may reduce a supplier’s marketing and administrative costs. Lowering supplier costs creates a larger operating margin which hopefully gives the aggregated group greater buying power. The reduced costs may then be passed on to the individual consumers in the buying group as savings on their energy bills.

Ohio law gives local governments the option to choose either an “opt-in” or “opt-out” form of aggregation. Under the opt-out method, residents are automatically included in the buying group unless they withdraw from the group or have already chosen an alternative supplier. Under the opt-in model, each resident is required to agree to participate in the program before being included in the aggregation pool.

Since 2001, over 200 local governments – including townships, villages, cities and counties – have successfully formed buying pools to save their residents money.

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Affinity aggregation

“Affinity” groups such as churches, college alumni clubs and professional organizations may also aggregate their members to achieve savings. Each group member who wants to participate in the buying pool must join, or “opt in,” to be part of the program. Members will enter into individual contracts with the program’s electric supplier.

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Understanding your electric bill

Beginning January 1, 2001, all electric bills were reformatted so that you will know exactly what you’re being charged for. Costs are now unbundled to show consumers the various components that make up your monthly amount due. The format may be different for each electric company but the charges are the same. The Office of the Ohio Consumers’ Counsel, the residential utility advocate, has provided definitions for all possible charges that may appear on electric bill from any of Ohio’s local electric companies.

	Account Number, Current Charges and Due Date
	Previous Charges
	Customer Charge: a fixed charge to cover billing, metering and other customer service operations.
	Distribution Charge or Delivery Charge: costs associated with the poles and wires used to deliver the electricity to your home and any other taxes and charges related to the delivery process.
	Transition Charge: costs the electric utility is permitted to recover based on various expenses, including the building of power plants to generate electricity. The transition charges related to generation will be removed once the local electric utility moves to full competition on January 1, 2006. The remaining transition charges will be removed from all bills no later than the end of 2010, however the date varies by company.
	Transmission Charge: pays for the transportation of electricity from the power plant to a substation. The substation connects with the local distribution system, which delivers the electricity to your home.
	Generation Charge: pays for the production of electricity at a power plant. This part of your electric service, also known as the supply of electricity, is now open to competition.
	Price To Compare: this is the price you pay for the supply of electricity. You can use the price to compare as a tool when you shop for electricity.
	Metered Usage: the amount of electricity that you used during that billing cycle in kilowatt hours.
	Actual Reading or Estimated Reading: actual readings reflect the kilowatt-hours used in that billing cycle that your local electric utility takes directly from your electric meter. When an actual meter reading is not taken, the company estimates an amount based on your past usage and the weather during that billing cycle.
	12 Month Historical Usage: an account of your electric usage for each of the past 12 months on a monthly or daily basis. Depending on your local utility this may appear in a chart form with exact kilowatt hours used each month or in a graphical representation of each month’s usage.
	Average Monthly or Daily Usage: an average monthly usage taken from your past 12 month’s history. A daily average is based on usage only from the month for which you are being billed.

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Meter reading

It is important to understand electric meter readings and how they affect monthly utility bills. Electric companies are only required to read a customer’s meter once a year; however, many companies complete actual readings more frequently. When a meter is not read by an employee of the electric company, an estimate will appear on a customer’s bill based on an average of the previous year’s usage.

Your electric meter directly affects your total monthly bill, and you have a right to:

• Request an actual meter reading, if usage has been estimated for more than two consecutive billing cycles.
• Have the meter tested to ensure it is working properly. Be sure to check with the utility to find out if any fee will be charged.
• Make payment arrangements for any back billed amounts that are based on a defective meter.

By learning how to read your own electric meter, you can monitor your usage and double-check your bill. The glass-enclosed electric meter is usually round in shape and found outside the home. The unit has four small, round dials with digits 0-9 displayed on each one. A spinning disk beneath the dials speeds up and slows down according to your electric usage. The dials read from left to right and represent your electric usage measured in kilowatt-hours (kWh). When the pointer is between two numbers, use the smaller number. For example if the pointer is between two and three, you record two since it is less than three.

Determining the number may seem tricky when the pointer is between zero and another number. If the pointer is between nine and zero, you record nine because the zero acts as the number 10. However, in the case where the pointer is between zero and one, you would record zero because it is less than one.

To discover how much electricity has been used in your home or apartment, pick a date to take a reading of your meter. Then on the same date the next month, read your meter again. Subtract the first reading from the second reading to determine the amount of electricity that was used during the month. You can monitor your electric usage on a daily or weekly basis by taking regular readings.

Be aware that there are other components of a utility bill in addition to the base rate that might affect the amount you are required to pay. Learning how to read your electric meter gives you a good indication of what your bill will be, rather than the precise amount you will pay.