Who (other than FirstEnergy) understands the inner workings of the Ohio Edison Electric rate hikes?

Sue Daugherty
Mar 23, 2010

Well, I went to the forum that the Ohio Consumer's Counsel (OCC) held in Sandusky on September 23. Its purpose was to educate electric customers on what the rate hike (Senate Bill 221) is about. The theory being that once the customers understood the new law (SB 221) they could then understand Ohio Edison's rate hikes and voice their support or opposition. (Electric rates are scheduled to increase in 2009, 2010 and 2011. Then in 2012 they file for another re-rating.)

For me, the OCC provoked questions that need to be answered by FirstEnergy before a customer could know whether or not to support the hike in electric rates. Here's what I took away from the OCC's forum/meeting and from doing a little research of my own. Also, I spoke with Dave Rinebolt, attorney and director of Ohio Partners for Affordable Energy and Mark Durbin, Senior Public Relations Representative for FirstEnergy.

According to the OCC, First Energy's net income in 2007 was $1.31 billion. Over three years consumer rates would increase an "average" of $2.04/month in 2009, $3.06/month in 2010 and $5.22/month in 2011. (This is based on consuming 750 kwh/month.) No estimate was given for the "average" cost increase for a home that is ALL electric.

If you're like me, you are probably breathing a sigh of relief when you read those dollar amounts. But don't! The devil is in the details. The rest of the story is, the "average" household numbers don't reflect the house that is all electric. All electric homes will cost much more, but no one can tell me how much more. Until the customer gets an answer to that question how can he/she support or oppose this rate hike? If you owned an all electric home, wouldn't you like to know that answer?

The other devilish detail that deserves more explanation is this "deferring costs" to supposedly help the customer. All that means is that the rate hike that customers are going to experience in 2009, 2010 and 2011 aren't the real costs. It appears as though FirstEnergy gets to put off charging the customer the real costs and recoup them later. With a net income in 2007 of $1.31 billion, I can only believe that this is a lucrative business decision on the part of FirstEnergy.

At first listen, "deferring" a hike in rates sounds real good. Is sounds like FirstEnergy is concerned about the customer's well-being and is trying to mitigate the financial burden, as best as possible. What we aren't being told is the costs FirstEnergy is not recouping today will be recouped in their next "Electric Security Plan" for 2012. What will that cost the customer? Until we know the answers to all of these questions in clear and certain terms, citizens should be applying severe pressure to refuse the proposed increase in electric rates.

Write to the PUCO at 180 E. Broad Street, Columbus, Ohio 43215. While you are at it, write to our governor, who appoints commissioners to serve on the PUCO, The Governor's Office, Riffe Center, 30th Floor, 77 South High Street, Columbus, OH 43215-6108.

Comments

Anonymous

I'm going to keep my comments to myself as not to sway anyone's opinion on who's feeding them a load of BS...now, everyone, please look at your electric bill and tell me if you're paying 5.9 cents/kwh. Don't take my word for it...look at your electric bill and compare what you're paying to the figure this dude presented (5.9 cents). How bad is it comparatively?

Anonymous

On my bill they tell me in bold letters that it's 5.6 cents, but you do the math and the actual rate is 12.1 cents per kWh.

Anonymous

Come on First Energy, you have engineer's there that can write a small program and have each customers past usage put into a small equation and have the EXACT amount the new rates would cost each individual account!

They will have this equation written if the rate increases, and truth be known, its already written!

I suggest the author interview the PUCO and First Energy and ask why this SIMPLE solution can't be shown on our future bills?

Current bill $xxxx
Future bill after increase $xxxx

It isn't that hard!@

Whats hard is to get the PUCO to work for us when the utilities aren't treating them to free events.

Anonymous

Well, you do not have to have someone do this for you, you can do it yourself.

Multiply your current bill by the increase...notice that Sue does not give the percentages, just some dollar amounts that probably will be your exact increase.

If the rate increase is 4% then multiply your usage section of you bill by 0.04. The answer would be your increase.

Anonymous

12.1 cents is still cheaper than AEP, even before the 45% increase that AEP wants.

Anonymous

I don't get it. Why would anyone, asked for their vote on a rate increase, comply? Why not drive by their offices and just throw your money in the door?

Anonymous

All this electrical talk is the exact reason I’m voting for John McCain. We need a couple of mavericks like john and sara to shake this thing up. John McCain was a prisoner of war in veitanam, he knows what its like to go without electric. Sara Palen lives in a state with 6 months of night. Can you imagine her electric bill? Who better than these two mavericks to fight for hard workin retired people like you and me. I urge you to vote for McCain on election day, besides Barack Hussein Obama is a friend of terrorist, for crying out loud he bombed the capital!

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