Util­i­ties ob­ject to probe by PUCO to lower rates

At is­sue is whether tax cut ben­e­fits should be passed on to cus­tomers.

Dayton Daily News - - FRONT PAGE - By Thomas Gnau Staff Writer

Ohio’s big­gest elec­tric util­i­ties said they ob­ject to an in­ves­ti­ga­tion into whether the util­i­ties should lower cus­tomer rates in the wake of re­cent fed­eral tax cuts that largely ben­e­fit the com­pa­nies.

In a Jan. 10 or­der, the Pub­lic Util­i­ties Com­mis­sion of Ohio said it wanted to ex­am­ine whether power com­pa­nies could “pass ben­e­fits re­sult­ing from the leg­is­la­tion (the tax pack­age) on to rate pay­ers.”

“Broadly speak­ing, the com­mis­sion au­tho­rizes util­i­ties to re­cover ex­penses from their cus­tomers, in­clud­ing fed­eral tax obli­ga­tions,” Asim Haque, the PUCO chair­man, said in a state­ment. “If that fed­eral tax obli­ga­tion is re­duced, then util­ity rates should also be re­duced, cre­at­ing sav­ings for cus­tomers.”

Day­ton Power & Light is among com­pa­nies, in­clud­ing Ohio Power, Ohio Edi­son, Duke En­ergy Ohio, Cleveland Elec­tric Il­lu­mi­nat­ing, and the Toledo Edi­son Co. that filed a rare joint re­sponse that has nu­mer­ous ob­jec­tions to the re­quest.

The Of­fice of the Ohio Con­sumers’ Coun­sel said it be­lieves the in­ves­ti­ga­tion is needed.

“DP&L and other elec­tric util­i­ties have filed at the PUCO to pre­vent or limit re­duc­ing their rates to share fed­eral cor­po­rate tax cuts with Ohio con­sumers,” the of­fice said in a state­ment Tues­day. “Once again, the util­i­ties are at­tempt­ing to use Ohio’s 2008 en­ergy law to fa­vor them­selves over con­sumers in the rate-set­ting process.”

The con­sumer coun­sel’s of­fice thinks util­ity con­sumers should see lower charges as a re­sult of the fed­eral tax cuts.

One ob­jec­tion the util­i­ties are rais­ing in their PUCO fil­ing is that low­er­ing rates now would amount to “retroac­tive rate-mak­ing.”

Also cit­ing a 2008 state law on “elec­tric se­cu­rity plans,” they ar­gue that the PUCO can­not re­duce rates with­out the com­pa­nies’ con­sent.

Though “elec­tric se­cu­rity plans” were formed to pro­tect util­i­ties’ fi­nan­cial po­si­tion in what was meant to be a more com­pet­i­tive en­vi­ron­ment, Bruce We­ston, Ohio con­sumers’ coun­sel, has asked leg­is­la­tors to con­sider get­ting rid of them al­to­gether.

“You would be solv­ing a lot of prob­lems and do­ing a lot of good for Ohioans by re­form­ing the 2008 law to elim­i­nate elec­tric se­cu­rity plans,” We­ston tes­ti­fied be­fore the Ohio House Pub­lic Util­i­ties Com­mit­tee last month.

In a state­ment, a spokes­woman for DP&L said the com­pany has prices that are “cur­rently the low­est in the state.”

“Ohio util­i­ties can­not raise or lower rates with­out ap­proval through a for­mal reg­u­la­tory process,” DP&L’s state­ment said. “We are com­mit­ted to work­ing with Ohio reg­u­la­tors to seek out the most ef­fec­tive way for our cus­tomers to re­al­ize any sav­ings re­sult­ing from the new tax law.”

A spokesman for Duke En­ergy, which serves cus­tomers in But­ler and War­ren coun­ties, said the PUCO’s Jan. 10 or­der de­mands clar­ity and a trans­par­ent process.

“From Duke En­ergy’s per­spec­tive, we re­main com­mit­ted to work­ing with our Ohio reg­u­la­tors to de­ter­mine the most prac­ti­cal way for our cus­tomers to re­al­ize the sav­ings from the new tax law,” Duke spokesman Lee Freed­man said in an email. “There are many ways to in­cor­po­rate the sav­ings, from de­creas­ing rates to mit­i­gat­ing the im­pact of fu­ture in­creases.

“Like any changes to our rates, we must gain for­mal reg­u­la­tory ap­proval be­fore im­ple­ment­ing any cus­tomer sav­ings from the new tax law,” he added.

A mes­sage was left with a spokesman for the PUCO.

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