For Immediate Release
Contact: Jason Gilham
614 | 466 7750
PUCO extends discounted rates for FirstEnergy electric heating customers
COLUMBUS, OHIO (May 25, 2011) – corrected version – The Public Utilities Commission of Ohio (PUCO) today extended the current freeze on FirstEnergy all-electric heating customer rates through March 31, 2013. Following the two-year freeze, FirstEnergy will reduce a portion of the discount annually over six years through 2018.
“This gradual, eight-year plan retains a substantial portion of the discount and allows FirstEnergy electric heating customers time to prepare for increased rates,” PUCO Chairman Todd A. Snitchler stated. “Our long-term solution to this difficult issue is aligned with proposals offered by consumer advocates, including the Office of the Ohio Consumers’ Counsel.”
Between Oct. 31, 2011 and March 31, 2013, FirstEnergy will adjust the residential generation credit (RGC) to maintain existing discount levels. During this time, electric heating customers using 3,500 kilowatt hours (kWh) of electricity per month will owe a monthly bill of approximately $191 for Cleveland Electric Illuminating, $229 for Ohio Edison and $275 for Toledo Edison.
Beginning in 2013, FirstEnergy will phase out the RGC in six equal annual reductions made each year through 2018. The Commission’s decision does not impact the approximately 3.6 cent per kWh discount associated with the economic development and residential distribution credit riders.
The RGC discount is limited to residential electric heating customers and will be applied only during the winter heating season from Oct. 31 to March 31. Homebuyers who purchase a home that uses electricity as the sole or primary source of heating will be entitled to receive the same level of discounts approved by the Commission as long as the new homeowner otherwise qualifies for the discounts, maintains electric heat and the discounts remains in effect.
The Commission further determined that the intervenors to this case were unable to provide sufficient evidence of misleading marketing practices by FirstEnergy or of contracts between FirstEnergy and all-electric customers promising permanent discounts.
During the energy crisis of the 1970s, FirstEnergy implemented discounted electric generation and distribution rates for customers who lived in all-electric homes. In 2006, the PUCO began to reduce the all-electric rate discounts for several reasons. Discounted rates resulted in customers paying less than the actual cost paid by FirstEnergy to purchase electricity for their customers. Additionally, artificially low electric rates work against efforts to encourage energy conservation. By 2009, FirstEnergy all-electric customers who had been grandfathered at the discounted rates continued to receive reduced generation and distribution discounts as long they remained at the same residence.
Nonetheless, many all-electric customers began to see their bills increase significantly during the 2009-2010 winter heating season. In March 2010, the PUCO responded by directing FirstEnergy to temporarily return the affected customers’ rates to the discounted level in effect on Dec. 31, 2008. This temporary relief was approved to remain in effect through May 31, 2011. In October and November 2010, the PUCO held six local public hearings to provide FirstEnergy customers an opportunity to express their views regarding the all-electric discount and a long-term solution to the issue.
A copy of today’s Commission opinion and order will be made available at www.PUCO.ohio.gov. Click on the link to the Docketing Information System (DIS) and enter the case number 10-176-EL-ATA.
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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