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DP&L distribution rate case

In November 2015, Dayton Power & Light (DP&L) filed an application at the Public Utilities Commission of Ohio (PUCO) to increase distribution rates billed to its customers.

What are distribution rates?

Electric bills are comprised of two main parts — the cost of producing or purchasing electricity for customers and the cost of delivering electricity to customers’ homes and businesses. The cost of producing or purchasing electricity, known as generation rates, makes up about 60 percent of an average electric bill.

The distribution rate represents the costs associated with delivering electricity to your home or business.  These costs include things such as installing and maintaining electric lines that run through neighborhoods, reading electric meters, processing bills and responding to customer service calls.

What is the PUCO’s role in setting electric distribution rates?

Under Ohio law, a public utility is allowed to recover from customers its operating expenses, plus a reasonable return on its infrastructure investments. When a utility requests a rate increase from the PUCO, several steps are taken to review the company’s finances and to ensure the company is fulfilling its responsibilities.

When evaluating proposed rates, PUCO staff looks at whether the proposed rates would provide the utility with adequate operating revenue. In general, the cost of providing service to customers, maintenance of infrastructure and equipment expenses, depreciation expense, taxes and a return on the company’s infrastructure investment are used to calculate the utility’s revenue requirement. The revenue requirement is the amount of money a company is allowed to collect from its customers during a given year. The PUCO staff prepares a report that makes recommendations to the Commission. The Commission is not bound by the staff recommendations and may implement some suggestions and reject others.

What is DP&L requesting in its application?

DP&L requested an increase of its revenue requirement by $65.8 million and an increase in the customer charge from $4.25 to $13.73 per month.  In addition, DP&L requests to establish three new riders: the Uncollectible Rider, allowing the company to recover the actual amount of bad debt costs instead of an estimate in base rates; the Regulatory Compliance Rider, allowing recovery of costs associated with unforeseen regulatory changes; and the Storm Cost Recovery Rider, to allow recovery of costs incurred as a result of major storms.

What did the PUCO staff recommend?

On March 12, 2018 the PUCO staff filed its report of investigation regarding DP&L’s application.  The staff report recommended limiting the annual revenue increase in the range of $23.2 to $28.1 million, and limiting the proposed customer charge to $7.88 per month.  Using its recommendations, PUCO staff estimates a residential customer using 1,000kWh would see a monthly increase of $3.39. 

The PUCO staff report advises the PUCO commissioners of the staff’s recommendations.  However, the Commission is not bound by the staff recommendations and may implement some of the staff’s suggestions and reject others.

How can I make my voice heard?

Two local public hearings will provide customers an opportunity to express their views on DP&L’s proposal to increase its rates for electric distribution service.  The local public hearings are scheduled as follows:

Tuesday, May 8, 2018 at 1:00 p.m.
Dayton Municipal Building
Council Chambers
101 W. Third St.
Dayton, Ohio 45402

Thursday, May 10, 2018 at 6:00 p.m.
Dayton Municipal Building
Council Chambers
101 W. Third St.
Dayton, Ohio 45402

Those who testify at the local public hearings will have their comments added to the case record.

Consumers may also submit comments online at www.PUCO.ohio.gov or by mail addressed to 180 E. Broad St., Columbus, OH 43215. Correspondence should include the case number 15-1830-EL-AIR.

An evidentiary hearing is scheduled for June 6, 2018 at 10:00 a.m. at the PUCO offices in Columbus.

Where can I learn more?

The entire case record, including the company’s application, accompanying testimony and the staff report is available on the PUCO website. Click on the link to Docketing Information System (DIS) and search for case number 15-1830-EL-AIR.