High utility rates could hurt efforts

SANDUSKY High utility rates pose a significant challenge in attracting new advanced manufacturing to
May 24, 2010



High utility rates pose a significant challenge in attracting new advanced manufacturing to the county.

"For power-hungry manufacturers with heavy average and peak loads, these rates represent a significant added cost that could dissuade a manufacturer from operating in Erie County," a recent economic report states.

The study compared rates charged in Erie County to similar counties in Ohio, Indiana, Kentucky, Iowa and Tennessee.

Here, the average commercial price of electricity approaches 10 cents per kilowatt hour, while the industrial rate is about 5.5 cents per kilowatt hour. In the other communities, the commercial rate ranged from 5.8 to 7.4 cents per kilowatt hour and the industrial rate was about 4.3 cents per kilowatt hour.

Ohio Edison, a subsidiary of FirstEnergy Corp., provides electricity across the county. The company has not had a rate hike since 1994, said Gary Mortus, Ohio Edison area manager.

That could change soon, however, as the company has filed for a rate increase and will have local public hearings within the next few weeks, said Shana Eiselstein, spokeswoman for the Public Utilities Commission of Ohio.

PUCO can approve or deny the rate increase and could make a decision by the end of the year, Eiselstein said.

State Senate Bill 221 could also affect electric utility rates. The bill's goals include new bonding authority for advanced energy projects, advanced (including renewable) energy portfolio standards, energy efficiency standards, all of which could impact rates.

The bill was approved by the Ohio Senate and is being reviewed by the Public Utilities Committee in the State House of Representatives.

"It remains to be seen what types of changes will occur to that legislation," Eiselstein said.

Mortus acknowledged local rates are higher here than in other areas, but argued the reliability of service can serve to offset the added cost.

"When you turn on the switch does it work? Will you have outages?" Mortus asked. "Our response time to restore that power -- all of those come in to play."

FirstEnergy was blamed for the blackout in 2003, which impacted the entire Eastern Seaboard, the Midwest and Canada.

"The nation's worst blackout began with three power line failures in Ohio and should have been contained by operators at FirstEnergy Corp., a three-month government investigation concluded," The Associated Press reported in late 2003.

"If someone is looking at this location and is high technology -- again we're going to be competitive with our rates with other areas," Mortus said. "I don't believe there's a huge difference in cost."