Sunday, January 28, 2001

The good news: stable electric rates

New law opens door to competition

By Mike Boyer
The Cincinnati Enquirer

        In the midst of this winter's skyrocketing natural gas costs, there's at least some good news on the other half of the monthly utility bill: electric rates.

        Legislation that took effect Jan. 1 opened Ohio's $11 billion power industry to competition and contains a provision freezing residential electric rates for five years.

        The legislation, which separates or “unbundles” consumer electric bills into separate generation, transmission and distribution charges also mandates a 5 percent cut in the generation portion of residential electric bills starting this month.

        Cincinnati Gas & Electric says that amounts to a cut of about $2.30 a month for the typical residential customer.

        Unlike natural gas, which the utility buys on the wholesale market, CG&E generates nearly all the electricity it sells with low-cost coal. That's kept the utility's electric rates among the lowest in Ohio.

        The new law allows Ohio residential and business customers to shop around for a company to generate electric power. CG&E will continue to deliver and transmit the electricity and be regulated by the Public Utilities Commission of Ohio.

        To push the program called Electric Choice, the state's power companies have underwritten a $33 million radio and TV advertising campaign to get consumers interested in the effort.

        The Electric Choice program, for now, remains more a hope than reality for CG&E customers. That's because the handful of power marketers who have entered the state have concentrated their efforts in northern Ohio, where power rates are much higher.

        Alan Schriber, chairman of the Public Utilities Commission, says Cincinnati area electric consumers probably won't see the real benefits of the choice program until local municipalities band together in purchasing pools.

        Several power providers have said they expect to launch marketing efforts in the Cincinnati area later this year.


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