CINCINNATI, Nov. 1, 2004 (BUSINESS WIRE) — The Cincinnati Gas & Electric Co., the Ohio operating company of Cinergy Corp., announced that it has filed with the Public Utilities Commission of Ohio a request for rehearing in response to the Commission’s September 29, 2004 order which ruled on CG&E’s rate stability plan settlement. The Company’s submittal provides the PUCO with three choices: adopt the original rate stability plan settlement; approve an alternative proposal included with this submittal; or move customers to market prices for electricity.
CG&E has attempted to meet the Commission’s stated objectives to provide rate certainty to customers and revenue certainty to the company through 2008, while encouraging growth of a competitive market for electricity. The Company believes that both the original rate stability plan settlement and the alternative proposal submitted Friday meet these objectives and will provide lower costs for customers when compared to market prices for electricity.
“CG&E’s electric rates have been frozen since 1992 and all of the underlying costs of generating electricity, like coal and natural gas, have increased dramatically,” said Greg Ficke, president of CG&E. “We believe that the Stipulation that we originally filed was fair, and we cannot accept the many changes made by the PUCO.
“We have worked in good faith to develop an acceptable alternative for the Commission to consider and believe that the new proposal protects customers from the volatility of market-based electric prices. It also requests a forum to develop a regulatory framework that will allow us to make new investments in Ohio to meet our customers’ future needs.”
Under the terms of the new proposal, an infrastructure maintenance fund of between four and six percent of the generation rate will be created as part of CG&E’s price for electricity, in exchange for a four-year commitment of CG&E’s low cost generation to provide electric service to consumers in the greater Cincinnati area.
It also creates a process that will allow CG&E to maintain system reliability by permitting the company to apply annually to the PUCO to flow through to customers, on a dollar-for-dollar basis, the cost of purchased power and reserve capacity to meet customer demand for power.
CG&E would also be permitted to increase the generation rate for non-residential customers by four percent per year in 2005 and 2006 and by six percent for residential customers in 2006 to reflect investments in environmental compliance, homeland security and taxes. The company would have to apply to PUCO for any increases in 2007 and 2008. These charges would be avoidable by the first 50 percent of non-residential customers and 25 percent of residential customers switching to alternate suppliers. “The ability of switching customers to avoid these charges was one of the messages we received from the Commission’s order and will encourage the development of the competitive electric retail market,” Ficke said.
In the rehearing application, CG&E also said it would move to implement market-based rates in 2005 for non-residential customers and 2006 for residential customers if the PUCO does not accept, or makes unacceptable modifications, to the alternative proposal or does not return to the provisions of the original agreement.
CG&E serves approximately 640,000 electric customers in Southwest Ohio. Its parent, Cinergy Corp., is one of the nation’s leading diversified energy companies.