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Electricity Rate Hike Sought: FirstEnergy Asks PUCO to OK Increase That Would Boost Cost By Nearly 16.1% By 2011

August 1, 2008

By Jim Mackinnon, The Akron Beacon Journal, Ohio

Aug. 1–FirstEnergy Corp. customers will see electricity rates increase more than 15 percent over three years starting in 2009 under a plan the Akron utility gave to state regulators late Thursday.

The 2,103-page proposal, which needs approval by the Public Utilities Commission of Ohio, calls for:

–A 5.3 percent increase in total customer rates in 2009.

–A 4 percent increase in total rates in 2010.

–A 6 percent increase in total rates in 2011.

Compounded, that works out to a nearly 16.1 percent increase over the three-year period.

The new rates would take effect Jan. 1 each year.

Critics had predicted higher rate increases, a FirstEnergy spokesman said.

“For our customers, to see gas go up to $4 a gallon and natural gas prices going up, they are going to look at these as modest increases. They should feel good that electricity will continue to be a good value,” FirstEnergy spokesman Ralph DiNicola said.

The PUCO will hold public hearings before voting on the FirstEnergy request. The commission has 150 days from the date of the filing to act.

The office of the Ohio Consumers Counsel said it will carefully review the filing from FirstEnergy and those from all the other electric utilities that were required to submit an “Electric Security Plan,” or ESP, on Thursday.

These would be the first rate increases since 1990 for Ohio Edison customers and the first increases since 1996 for CEI (Cleveland Electric Illuminating) and Toledo Edison customers, FirstEnergy said in a news release.

Thursday was the first day electric utilities were able to file these plans under Ohio’s new electricity law. The new law required the filings. FirstEnergy also said its costs to make and deliver electricity have “increased dramatically” since its last allowed base rate increase 12 years ago.

FirstEnergy said the typical Ohio Edison residential monthly bill, based on 750 kilowatts of usage, would actually see a decrease of $1.28 in 2009, then increase by $3.06 monthly in 2010 and another $3.67 a month in 2011.

The first-year projected decrease for residential customers involves how FirstEnergy is distributing costs to different classes of customers, spokeswoman Ellen Raines said.

Actual monthly bills will depend on how much electricity each FirstEnergy customer uses, the utility said.

The rate figures supplied by FirstEnergy include charges for the cost of generating, transmitting and distributing electricity.

The filing was required by a new state law and incorporates a rate case plan that FirstEnergy gave to the PUCO in June 2007.

FirstEnergy said phasing in the increased rates over three years will protect customers from the kind of “rate shock” experienced in other states.

The FirstEnergy plan also includes $50 million that will be set aside to support energy efficiency and economic development and job retention plans in Ohio.

FirstEnergy also submitted what is called a “Market Rate Offer” plan that would implement a bidding process for the retail selling of electricity if the so-called ESP is not approved.

FirstEnergy said it put more information on Thursday’s filings on its Web site at http://www.firstenergycorp.com.

Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.

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Copyright (c) 2008, The Akron Beacon Journal, Ohio

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