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PUCO approves agreement in Duke electric security plan case

Plan separates generation and distribution businesses, transitions to market rates

COLUMBUS, OHIO (Nov. 22, 2011) – The Public Utilities Commission of Ohio (PUCO) today approved an agreement that will set electric generation rates for Duke Energy Ohio customers from Jan. 1, 2012 through May 31, 2015. Under the new electric security plan (ESP), Duke will transfer its generation assets to an affiliate and hold auctions to determine generation rates.

“Today’s decision is another step in the process of encouraging a robust and vibrant competitive market for electric consumers,” PUCO Chairman Todd A. Snitchler stated. “The plan promotes fully competitive markets while providing rate stability, and customers will begin to reap the benefits of true competition.”

The agreement approved by the Commission was supported by 30 parties, including Duke, PUCO staff, the Office of the Ohio Consumers' Counsel, Ohio Energy Group, the Ohio Manufacturer's Association, the city of Cincinnati, and Ohio Partners for Affordable Energy.

Under the plan, Duke must transfer all generation assets to an affiliate by December 31, 2014. Upon completion of the transfer, Duke Energy Ohio will become a distribution-only utility.

Duke will hold five auctions to determine rates for electric generation. During the auctions, the first of which will take place in December 2011, competitive suppliers will bid for the right to supply electricity to Duke customers. Subsequent auctions will be held in May 2012, November 2012, May 2013 and November 2013. Each auction will be conducted by an independent bidding manager, and the PUCO must accept the final results.

The PUCO anticipates that the ESP will result in an initial decrease in electric rates for residential customers beginning on Jan. 1, 2012. However, the actual dollar amount of the impact remains unknown pending the results of the first auction. Duke customers will remain free to choose their own electric generation supplier or participate in a government aggregation buying group.

The ESP also provides incentives for economic development and energy efficiency. Duke will contribute $1 million annually from 2012 to 2014 to support economic development efforts in its service territory. The utility will commit $100,000 to support economic development and energy efficiency initiatives among Ohio manufacturers and work to educate small and medium-sized business about available energy efficiency programs.

Duke will also provide funds to assist low-income electric customers, including $1 million annually from 2012 to 2014 to support low-income weatherization efforts and $350,000 in 2012 to help customers at or below 200 percent of poverty level pay their bills. Percentage of Income Payment Plan (PIPP) customers will remain retail generation customers of Duke, but their electricity will be supplied by FirstEnergy Solutions at a five percent discount off the residential price to compare.

Duke filed its ESP application in June 2011. The PUCO held four local public hearings to provide Duke customers an opportunity to express their views about the company’s proposal. Following three months of negotiations, parties in the case filed an agreement on Oct. 24, 2011 settling issues in the company’s application.

A copy of today’s Commission opinion and order is available will be made available online later today at www.PUCO.ohio.gov. Click on the link to the Docketing Information System (DIS) and enter the case number 11-3549-EL-SSO. To learn more about competitive electric supplier offers, access the PUCO’s online Apples to Apples rate comparison charts.

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The Public Utilities Commission of Ohio (PUCO) is the sole agency charged with regulating public utility service. The role of the PUCO is to assure all residential, business, and industrial consumers have access to adequate, safe, and reliable utility services at fair prices while facilitating an environment that provides competitive choices. Consumers with utility-related questions or concerns can call the PUCO Call Center at (800) 686-PUCO (7826) and speak with a representative.

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