Office of the Ohio Consumers' Counsel

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Speak out about proposed Dominion East Ohio rate increase

View the OCC’s fact sheet on this issue.

The Office of the Ohio Consumers’ Counsel (OCC), the residential utility consumer advocate, encourages customers of Dominion East Ohio to express their opinions about the utility’s proposed rate increase.

Background

In August 2007, Dominion East Ohio filed to increase its rates by $75 million per year. Based on Dominion filings this would mean a 16.9 percent increase in the delivery portion of customers’ bills in the East Region (including all areas Dominion serves in northeast and southeast Ohio), and a 26.8 percent increase in distribution portion of bills for customers in the West Region (including areas Dominion serves in northwest Ohio such as Lima).

What’s at stake?

This case is a “base” distribution rate case, which covers costs for services such as meter reading, billing and maintaining the distribution equipment. The base rate portion of a customer’s bill includes a flat-rate customer charge as well as a component that varies according to how much natural gas a customer uses. These charges represent roughly 28 percent of a typical customer’s bill.

The cost of the actual natural gas is not part of this case. That rate changes monthly based on the wholesale market or the price a customer pays to a competitive supplier.

The level of the flat-rate customer charge is an important point of contention in this rate case. The Public Utilities Commission of Ohio (PUCO) staff has recommended more than doubling Dominion East Ohio’s flat-rate customer charge while lowering the usage-based charge.

Currently, customers pay $4.38 per month (West Region) and $5.70 per month (East Region) as a flat-rate customer charge. The PUCO staff has recommended raising this charge to $17.50 for all Dominion customers. The utility had only requested to set its customer charge at $5.70 per month for both its service areas.

In addition to this rate increase, Dominion is also seeking approval to implement a 25-year Pipeline Infrastructure Replacement plan. Dominion estimates that plan would cost $2.6 billion. This would be equal to hundreds of millions of dollars in additional revenue paid by consumers. The extra fee charged to customers would be $1.12 per month during the first year, with the monthly fee going up as much as 90 cents each additional year. For example, Dominion estimates that customers would pay $8.88 per month for the pipeline replacement in 2019.

The utility is also proposing a $126.3 million plan to retrofit automated meter reading devices on all 1.3 million gas meters in its service territory. Dominion has identified that the additional cost of implementing the automated meter reading would be approximately 25 cents per month on customers' bill during the first year with increases to that monthly charge in future years.

What’s the OCC’s position?

The OCC’s position is that Dominion’s proposed rates are unreasonable and should be rejected by the PUCO. Based on the OCC’s review, the utility has failed to prove it needs additional money from its customers. In our tough economic times, the PUCO should be especially cautious about raising customer rates. The PUCO will make a final decision after holding important local hearings that provide customers with the chance to voice their opinions.

The OCC’s opposition to the rate increase can be attributed, in part, to Dominion asking for an unreasonable profit level; differences in the methods of accounting for pensions and employee benefits; and other expenses such as lobbying which customers should not have to pay for through higher rates.

The OCC opposes raising the flat-rate customer charge because such a change in the rate structure would negatively impact customers who attempt to conserve energy and result in low-use customers subsidizing high-use customers.

Loading more of Dominion’s costs into the fixed customer charge limits the ability for consumers to control their monthly bills by being more energy efficient. With customers’ budgets stretched thin, a higher flat-rate customer charge means customers would pay over $17 per month regardless of how much natural gas is used.

The OCC also recommends that Dominion East Ohio increase its proposed investment in energy efficiency from $6 million per year to $15.6 million per year. With rising energy prices, Dominion and its customers need all the resources possible to help control residents’ natural gas usage. The OCC believes energy efficiency offers consumers the most benefits for their money.

What consumers can do

The OCC provides the following questions that consumers can address at the local public hearings. These can be used as a guide to help consumers express their own opinions about the price they pay and the service they receive from Dominion in their home and community:

• What effect would even a small increase in your monthly electric bill have on you and others in your community (including seniors on fixed incomes, low and middle-income residents)?

• Should all consumers pay a larger flat-rate charge for delivery services or should a large portion of these delivery charges be based on how much natural gas is used so that energy efficiency efforts would help reduce your bills to the greatest degree possible?

• Have you made energy efficiency improvements that have helped lower your natural gas bill? Are you counting on the same savings to meet your household budget?

The PUCO will make the final decision about whether Dominion can raise customers’ rates. In order for public officials, community groups and individual consumers to make a difference, the OCC encourages attendance at the hearings and everyone to state their opinions by testifying. Decision-makers need to hear from those who will be affected by the higher bills.

The OCC will attend each public hearing to offer assistance to consumers and answer questions. In addition, a fact sheet titled “How to Testify at Local Public Hearings” is available to help residential consumers learn about how to provide public testimony.

Each statement will become a permanent part of the case record. The PUCO will consider all sworn statements before reaching a decision.

Based on a recent PUCO decision, Dominion customers will have opportunities to express their opinions on the utility’s proposed base rate increase on the following dates:

Youngstown: Monday, July 28, 2008, 2 p.m., Youngstown City Hall, 26 South Phelps Street

Lima: Tuesday, July 29, 2008, 1:30 p.m., Lima Municipal Center, City Council Chambers, 50 Town Square

Akron: Thursday, July 31, 2008, 1:30 p.m., Oliver R. Oscasek Government Center, 161 South High Street

Canton: Thursday, July 31, 2008, 7 p.m., Canton City Hall, 218 Cleveland Avenue

Cleveland: Monday, Aug. 4, 2008, 12:30 p.m., Frank J. Lausche State Office Building, 2nd floor auditorium, 615 West Superior Avenue

Geneva: Monday, Aug. 4, 2008, 7 p.m., City Hall Municipal Building, Council Chambers, 44 North Forest Street

Marietta: Tuesday, Aug. 5, 2008, 1:30 p.m., Marietta College, McDonough Auditorium, 215 Fifth Street

Garfield Heights, Monday, Aug. 18, 2008 at 6 p.m. Council Chambers, Garfield Heights Civic Center, Lower Level 5407 Turney Road

Youngstown, Tuesday, Aug. 19, 2008 at 6 p.m. Chevrolet Centre, 229 East Front Street

Akron, Thursday, Aug. 21, 2008 at 6 p.m. Charles Goodyear Memorial Pavilion, East Room, Goodyear Heights Metro Park 2077 Newton Street

In addition to attending the above hearings or for consumers unable to attend, letters can be written to the PUCO. All letters and envelopes should reference Case Number 07-829-GA-AIR. Letters should be sent to:

Public Utilities Commission of Ohio
Attn: Docketing Division
180 E. Broad Street
Columbus, OH 43215