In this issue:

• Stay connected to utility services this winter
• Thirty years of advocating for Ohio residents
• New plans bring customers higher electric rates
• Mid-winter home checklist
• Telephone Lifeline keeps consumers connected
• Q&A: 2005 Energy Policy

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Stay connected to utility services this winter

In the wake of rising energy prices, many residential consumers may find it difficult to pay their heating bills this time of year. As the cold winter weather settles in, the Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, is working hard to provide consumers with important information about how to stay connected to their utility services even when their wallets are stretched thin.

It is important for consumers to know that there are certain rules utility companies must follow before disconnecting natural gas or electric service. In addition, there are several payment options that consumers can take advantage of to help them keep their heat turned on during the winter season, just when they need it most.

The rules of disconnection

Utility companies must follow certain requirements to ensure that consumers have the opportunity to work out a payment plan to avoid disconnection of their electric or natural gas services. The requirements include:

• The disconnection process cannot begin unless a consumer has not paid their monthly bill within 30 days of the due date.

• The company must provide the customer a notice - either as a message in the bill or mailed separately - at least 14 days before disconnection.

• On the day that service is to be disconnected, the company must provide a customer with personal notice. If a consumer is not at home, the company may either leave the notice with an adult living in the household or leave the written notice in a visible location at the residence.

• During the winter heating season (November 1 - April 15), the company must contact the customer or another adult at the residence in person, over the telephone or by a hand delivered notice, at least 10 days prior to disconnection.

Reconnection and payment assistance

When facing disconnection, the following information is a sample of the available options for consumers:

Winter Reconnect Program. Ohio's winter reconnect program allows most households that have been disconnected or are threatened with disconnection due to non-payment of a utility bill to have service restored during the winter months by paying a fee. Consumers can use the winter reconnect program until April 14, 2006. To be reconnected, consumers pay the total amount they owe or $175, whichever is less, plus a reconnection fee of no more than $20. There is no income eligibility requirement for the winter reconnect program and consumers may only take advantage of it once during the season.

1/3 and 1/6 Payment Plans. When facing disconnection, consumers can propose to the company a payment plan that works best for them. If the company does not accept the proposed payment plan, it must provide one of two payment plan options to consumers: the 1/3 (where customers pay 1/3 of the total amount due each month, which includes their past due balance and current bill) or 1/6 (where customers pay 1/6 of the balance amount in addition to paying the full amount of the current bill). The 1/3 plan must be offered during the winter.

For more information on consumers' rights when facing a disconnection, the winter reconnect program or additional payment and assistance plans, contact the OCC toll free at 1-877-PICKOCC (1-877-742-5622) and online at www.pickocc.org.

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Thirty years of advocating for Ohio residents

In 2006, the Office of the Ohio Consumers' Counsel (OCC) celebrates its 30th anniversary as the sole state agency advocating for residential customers of investor-owned electric, natural gas, telephone and water customers. In 1976, the OCC was created by the Ohio General Assembly in the midst of a national energy crisis. While the utility companies as well as industrial customers had long been active participants in cases at the Public Utilities Commission of Ohio in order to protect their interests, residents needed an official voice. As a result, the OCC was established as the residential utility consumer advocate.

The need for the OCC is stronger than ever as it enters its fourth decade advocating for affordable, quality utility services. Changes in utility markets require residents to be more knowledgeable, careful and savvy energy and telecommunications consumers.

From competitive markets to advanced telephone options, much has changed since 1976. The OCC's steadfast efforts to achieve benefits for consumers have been and remain the agency's priority.

Upcoming editions of 2006 Consumers' Corner newsletters will further highlight the agency's 30 years of advocacy and look to the OCC's future goals.

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New plans bring customers higher electric rates

As of this writing in mid-December 2005, the Ohio Supreme Court had not rendered a decision in these electric cases.

On January 1, many electric customers began paying higher rates as the result of plans that went into effect over the objections of the Office of the Ohio Consumers' Counsel (OCC). The plans will determine the electric rates paid by most residential customers in Ohio through 2008.

The plans vary by company, but each will fail to promote competitive electric choices, which could help drive down prices. The rate plans for American Electric Power, Cincinnati Gas & Electric and FirstEnergy were approved by the Public Utilities Commission of Ohio (PUCO).

The OCC appealed each PUCO decision to the Ohio Supreme Court, where the cases are pending. While the OCC has asked the court to overturn the plans, the rates have gone into effect at least until a decision is issued.

American Electric Power

The rate plan for American Electric Power (AEP) includes an automatic 7 percent generation rate increase per year through 2008 for its Ohio Power customers. Columbus Southern Power customers' generation rates are going up by 3 percent per year through 2008. The OCC estimates that the typical residential customer served by Ohio Power will pay an average of $72 more for generation each year from 2006 through 2008. Those served by Columbus Southern Power will pay an average of $36 more per year.

Beyond the automatic increases, the rate plan allows AEP to ask the PUCO for additional generation rate increases based on costs related to items like environmental and security expenses.

Cincinnati Gas & Electric

Generation rates paid by Cincinnati Gas & Electric (CG&E) customers are increasing 10 percent in 2006 as a result of this company's rate plan. An additional 2 percent increase in generation rates will be imposed in 2007. The rate plan also allows CG&E to ask for PUCO approval of additional generation increases based on costs related to items like fuel and environmental compliance.

Based on conservative estimates by the OCC, it is predicted that if CG&E seeks additional increases, residential generation rates could increase by at least 20 percent in 2006. This could cost the average CG&E residential electric customer approximately $105 in 2006.

FirstEnergy

FirstEnergy's rate plan will keep electricity bills high in northern Ohio through 2008. The plan includes a "Rate Stabilization Charge" that equals the amount of the generation transition charge customers previously paid. While under Ohio's electric choice law the transition charge should have ended in 2005, the new Rate Stabilization Charge continues to impose the same amount each month, dollar-for-dollar. The OCC estimates that the average residential customer will pay between $180 and $240 each year, depending on which FirstEnergy company serves their community.

The rate plan also allows for FirstEnergy to request additional increases based on the cost of fuel to run power plants. An agreement has been entered into by the company and other parties that would delay those increased fuel charges until after 2008. In a separate agreement, the OCC and low-income advocacy groups obtained over $28 million in energy efficiency benefits.

While each rate plan is different, the OCC believes all three harm residential consumers and violate the Ohio law that promotes competition and requires that the companies charge rates based on the electric market by 2006. However, as a result of these plans, market-based rates are not in effect. The OCC will continue to advocate for consumers to benefit from more electric choices.

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Mid-winter home checklist

In the middle of the winter heating season, residential consumers can evaluate whether they have taken the steps needed to help control their natural gas usage and manage their bills. While the tips in the following checklist have appeared in recent issues of Consumers' Corner, this winter's high natural gas prices indicate they are worth repeating. In addition, consumers should review their monthly natural gas bills. Bills indicate whether a customer's usage is based on an actual meter reading or an estimate, and may show when the meter will next be read. If a bill is estimated, a consumer may be able to call in a reading to the company and receive an adjusted bill.

Based on the next meter read, consumers with a meter inside their home can make sure someone is at the residence or call the company to schedule an alternative date. Consumers also can ask the company for information about how to call in their own meter reading or whether a postcard is available to submit their reading by mail.

Consumers who cannot afford to pay their bill should immediately contact the local natural gas company to work out a payment schedule. Income-eligible consumers can find out about energy assistance programs by calling their local community action agency, the Office of the Ohio Consumers' Counsel (1-877-742-5622) or the Ohio Department of Development (1-800-282-0880).

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Telephone Lifeline keeps consumers connected

As winter heating costs keep rising, many households may not be able to afford both their heating and telephone bills. Income eligible households can receive assistance to stay connected or establish basic local telephone service through Lifeline. The Lifeline program allows households to have service at a monthly discount of between $8.25 and $16.83, and consumers will not have to pay a deposit or installation charges.

Most of Ohio's local telephone companies offer Lifeline programs. Consumers whose household income is at or below 150 percent of the federal poverty guideline are eligible. Consumers also can qualify if they receive assistance through many government programs such as Medicaid, food stamps, Supplemental Security Income, Section 8 housing and disability.

In June 2005, consumers began seeing two primary changes in the Lifeline program. These changes were handed down from the Federal Communications Commission (FCC). Consumers enrolling in Lifeline based on income eligibility must submit documentation that shows proof of income. Examples of acceptable documentation include: a prior year's state or federal income tax return; three consecutive months or current pay stubs; or a statement of benefits from Social Security or the Veteran's Administration. Consumers who qualify based on one of the participating assistance programs do not need to provide proof of income. Additionally, all telephone companies must perform random audits of their current Lifeline customers to ensure eligibility requirements continue to be met.

For more information about telephone assistance programs, contact the Office of the Ohio Consumers' Counsel toll free at 1-877-742-5622 to request the fact sheet on telephone Lifeline programs and a Lifeline application or view the fact sheet online at www.pickocc.org. Consumers also may call their local telephone company for more details.

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