Ohio Consumers’ Counsel issues electric market update

COLUMBUS, Ohio, Jan. 12, 2004 — The state agency charged with representing the interests of residential consumers called for a comprehensive investigation by state regulators into whether each of Ohio’s electric utilities are providing the reliable service required under the law.

The Ohio Consumers’ Counsel (OCC), the residential utility advocate, announced its request as part of its 2003 End-of-Year Update on Ohio’s Electric Market. A separate filing today at the Public Utilities Commission of Ohio (PUCO) formalized the request. In the filing, the OCC outlined numerous failures of electric companies to provide reliable service and questioned some utilities’ declining maintenance expenses.

The OCC requested that financial penalties be issued against electric utilities violating Ohio’s existing Electric Service and Safety Standards and that the PUCO evaluate whether the current standards are adequate.

“Ohioans deserve and state law requires that electric utilities provide reliable service. Problems that have recently come to light, including those resulting in the August 14 blackout, may be just the tip of the iceberg,” said Eric Stephens, Deputy Consumers’ Counsel. “Residential consumers are paying for reliable electricity through their current rates and deserve to have utilities held accountable for failing to fulfill their obligation.”

Beyond reliability failures, the OCC’s year-end update concludes that:

— Progress toward a competitive market continued to stagnate. Approximately 816,000 Ohioans had switched electric suppliers by the end of 2003, nearly the same number as had switched the previous year.

Residential consumers in Central and Southern Ohio, and in the Miami Valley, have had virtually no choice of alternative suppliers.


— Utilities proposed new obstacles to electric choice. Some of Ohio’s electric utilities have attempted to erect new barriers to make it more difficult for local governments to aggregate and individual customers to switch. For example, Dayton Power & Light intends to charge suppliers a monthly billing fee of approximately $2 per customer. Nowhere else in the state is such a fee charged.

— Electric utilities sought to violate the rate cap. Several utilities have attempted to circumvent the rate cap mandated under Ohio’s restructuring law. For example, FirstEnergy has asked the PUCO to effectively raise transmission rates charged to suppliers. Suppliers may be forced to pass those increases on to customers through higher generation rates.

— Risk of higher rates after the market development period remained. The state’s market development period, and the generation rate cap, ends on December 31, 2005. If the lackluster electric market fails to develop properly, many Ohioans will likely see their rates increase and have little or no competitive choices.

In its year-end update, the OCC calls for the PUCO to deal immediately with reliability issues, preserve consumers’ benefits from the electric rate cap, ensure that consumers are protected against unreasonable price increases after 2005 and eliminate utility-erected obstacles to competition.

“With several Ohio utilities putting up obstacles to competition and attempting to violate the rate cap, the OCC is working to protect residential consumers from potential electric rate increases now and in the future,” said Stephens.

About the Ohio Consumers’ Counsel

The Ohio Consumers’ Counsel (OCC) is the residential utility advocate serving as a resource for individuals who have questions and concerns or would like more information about the services provided by their publicly owned electric, natural gas, telephone and water companies. The state agency also educates consumers about utility 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 .

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