Three Ohio groups file complaint against Dayton Power and Light, accusing them of violating electric choice law

COLUMBUS, Ohio, Sept. 12, 2002 — With approximately sixteen months left in Dayton Power and Light’s (DP&L) market development period, customers soon could be facing higher electric rates as a result of the company’s failure to support the growth of a competitive market, three groups allege.

The Ohio Consumers’ Counsel (OCC), the residential utility advocate, joined by Industrial Energy Users-Ohio (IEU – Ohio) and American Municipal Power – Ohio (AMP – Ohio), filed a complaint Thursday calling for the Public Utilities Commission of Ohio (PUCO) to levy fines against DP&L for violating Ohio’s electric choice law.

“The requested $25,000 per day fine is pennies in comparison to the estimated $6 million in transition charges DP&L has been collecting each month from residential consumers to cover costs associated with building plants to generate electricity,” said Robert S. Tongren, Consumers’ Counsel.

“All we are saying is that consumers should get what they’ve been paying for and be able to benefit from the cost-effective transmission of energy and the reality of a competitive electric marketplace where supplier choices are available.”

In the complaint, OCC and its partners claim that DP&L has failed to comply with a PUCO order to transfer operational control of its electric transmission facilities to a Federal Energy Regulatory Commission (FERC) – approved Regional Transmission Organization (RTO).

As a result, DP&L has hindered the development of a competitive electric market in its service area and has stalled efforts to improve transmission reliability and provide consumers with a choice of electric suppliers. To date, there are no supplier offers for residential consumers in DP&L’s service area.

The parties are requesting that the PUCO direct DP&L to comply with Ohio law and order the following:

* Suspension of DP&L’s ability to collect any further transition-related costs from consumers.

* Payment of $25,000 per day for each day DP&L fails to comply with its commitment.

* Limitations on DP&L’s ability to set market based rates as the standard electric generation price at the end of its market development period.

* Extension of DP&L’s Market Development Period from December 31, 2003 to December 31, 2005.

“DP&L has failed to uphold its end of the bargain, so unfortunately we must file this complaint to protect customers’ interests as both a matter of law and fairness,” said Sam Randazzo, General Counsel for the Industrial Energy Users – Ohio.

“We are very concerned about the negative impact a malfunctioning wholesale market will have on consumers,” AMP-Ohio President Marc Gerken said. “Our transmission dependent member communities are longtime customers in the wholesale electric market and the possibility of the state being carved up into a jigsaw puzzle of different RTOs represents a significant threat. We fear obstacles, both technical and procedural, will be placed before us as we attempt to move power around the state. This represents a barrier to an effective and functioning market.”

In June 2002, the OCC and its partners filed a similar complaint with the PUCO against American Electric Power (AEP) and its operating companies, Columbus Southern Power and Ohio Power, for failing to meet its deadline to join an RTO. The parties are awaiting PUCO action on AEP’s request to dismiss the complaint.

The complaint filed recently alleges that DP&L’s failure to meet its obligations is contributing to relatively higher wholesale electricity prices and the lack of competition in Ohio.

This is due in part to high transmission rates that are the result of the accumulation, or “pancaking,” of charges from every utility whose transmission lines are used to transport electricity across the Midwest as well as other technical and procedural hurdles hindering the free flow of electricity.

RTO development and management of the transmission system will help to lessen the risks of power supply problems and wildly fluctuating prices, the groups said. These problems were very visible in the Midwest in 1998 and 1999.

Ohio’s electric restructuring law went into effect in October 1999 and opened the generation supply market to customer choice beginning on January 1, 2001. As required under the law and PUCO rules, DP&L and Ohio’s other investor-owned electric utilities filed a transition plan agreement in late December 1999. In 2000, DP&L’s agreement, or “stipulation,” was filed with and approved by the PUCO. This agreement specified the company’s commitment to join a FERC-approved RTO and transfer the operation of its transmission facilities by December 2001.

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 contact 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at .

About Industrial Energy Users – Ohio

Industrial Energy Users-Ohio (IEU-Ohio) is an association of large Ohio industrial energy consumers that spend collectively over $3 billion per year to obtain electricity and natural gas and employ over 250,000 people in Ohio. IEU-Ohio’s members work together to address matters that affect the availability of utility services and the cost of such services.

About American Municipal Power – Ohio

American Municipal Power-Ohio (AMP-Ohio) is the Columbus-based nonprofit wholesale power supplies and services provider for 85 member municipal electric communities in Ohio, Pennsylvania and West Virginia.

Source: Ohio Consumers’ Counsel

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