Office of the Ohio Consumers' Counsel

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Consumers' Counsel advocates for new rate options for customers of AEP and FirstEnergy

COLUMBUS, Ohio – January 16, 2007 – Customers of Ohio's two largest utilities, American Electric Power (AEP) and FirstEnergy, should be able to purchase an environmentally friendly green option, the Office of the Ohio Consumers' Counsel (OCC) said Friday in a filing at the Public Utilities Commission of Ohio (PUCO). The price of the green option would be determined through a competitive bid.

Additionally, the OCC requested that a cost-benefit analysis be conducted to find out if holding a competitive bid in AEP and FirstEnergy's territory for standard power would be advantageous for its customers.

The OCC's filing was made based on decisions by the Supreme Court of Ohio that found problems with the PUCO's approval of each company's rate plan. The Court's rulings were the result of appeals by the OCC. In May 2006, the Court agreed with the OCC that the FirstEnergy plan failed to offer customers a price determined through a competitive bid. In July 2006, the Court struck down the PUCO's decision approving the AEP plan. Both plans were returned to the PUCO for corrections.

"A green option would allow residents to support renewable energy and know that a portion of their new rate would be dedicated to furthering the need for greater energy independence and a better environment," said Janine Migden-Ostrander, Consumers' Counsel. "We believe that our proposal addresses the legal requirement that consumers have an alternative option to their current rates."

Competitive bids for FirstEnergy's standard service to customers were held in 2004 and 2005 but the auctions were determined to have failed by the PUCO. No rate option was offered to customers as a result of this process, which was a violation of Ohio's electric choice law.

The OCC believes that, based on market prices, an auction among competitive suppliers would likely not result in lower rates in AEP's service area. To meet the requirements of Ohio's electric choice law and comply with the Court's decisions, a green option would provide a new alternative and allow consumers to participate in a program that will help assist in diversifying the fuel sources used to create energy and improve the environment.

Under the green pricing option in the OCC's proposal, a competitive bid process would be used to determine the price each utility would pay for "renewable energy credits." Customers who sign up for the program would pay for a minimum of 200 kilowatt hours (kWh) worth of green product each month, which would be added to their other AEP or FirstEnergy charges. For example, the typical residential customer uses 850 kWh per month but could choose to buy as little as 200 kWh through the program. Consumers could choose to purchase a greater amount of their electricity through this green program as well.

Renewable energy credits are bought and sold by many utilities and other power producers and reflect renewable power that is being generated throughout the country. The existing credit system supports the development of new renewable facilities.

Many states require utilities to produce a portion of their power using renewables such as wind, solar, hydro and biomass. While Ohio has not implemented a Renewable Portfolio Standard, the OCC supports such a measure to ensure that the state is prepared to meet the current and future energy needs in a cost-effective and environmentally sound manner.

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at www.pickocc.org.