Expensive electric charges explained

Painesville Electric Department Superintendent Jeff McHugh is explaining why city residents accrue high transmission costs on their utility bills.

At a recent town hall meeting, McHugh compared electric charges to the Ohio Turnpike.

If you’re traveling from point A to point B using the turnpike to get there, you will pay a toll,” he said. “Transmission charges are the toll that we pay to get the market power we purchase to bring

into Painesville. Our turnpike authority is FirstEnergy.”

Transmission costs are based on the load that comes across transmission owner’s lines.

“They base everything off of the heaviest load in time,” he said. “That’s called coincidence peak. It occurs typically mid-July to midAugust.”

FirstEnergy also uses a formula to calculate cost.

“Since, 2015 they switched to a more forwardlooking formula because then they could estimate what those charges

would be moving forward because their attempt to build a larger program,” McHugh said.

“For example, while FirstEnergy only has seen a 3.2 percent rise in load over the last three years, they have been allowed to increase their charges by 21.7 percent over that same time. Moving forward, projections are showing 5 percent increases in 2019. Within the industry, many companies now see transmission as a superior profit center as compared to generation.”

Although many people believe transmission costs are unfairly calculated, he says the Federal Energy Regulatory Commission reviews and approves them.

McHugh said many

groups from the American Municipal Power attend placeholder committee meetings to voice their opposition about transmission charges.

“One of the lawyers from AMP actually goes to these meetings and tries to fight for all of us on these issues, because there’s no transparency, they don’t have to tell us about the projects and they don’t have to tell us when or where or how much they actually cost,” said City Manager Monica Irelan.

“We do question their methodology as an individual community and through AMP, too as a joint collaboration. So all of us under the joint action commission are fighting this.”