Office of the Ohio Consumers' Counsel

Press Room

November / December 2008

Ohioans speak out about proposed rate hikes
Parties Agree to Cut Proposed Dominion Rate Increase
OCC in your corner: Rate increase for Mohawk water customers cut in half
Ohio American Water consumers face rate hike and improved services
Incentives attractive for efficiency improvements
Consumer Alert: Review telephone bills for unfamiliar charges

Ohioans speak out about proposed rate hikes

During the summer of 2008, more than 500 Ohio consumers voiced their concerns about higher utility prices at local public hearings held by the Public Utilities Commission of Ohio (PUCO). Two major natural gas utilities, Dominion East Ohio and Vectren Energy Delivery of Ohio, and two privately-owned water companies, Mohawk Utilities and Ohio American Water, all under the regulatory authority of the PUCO, have filed rate increase requests with the Commission. Public concerns were recorded and accepted as testimony in their respective cases. Here is a sampling of what consumers have been saying:

Dominion East Ohio (DEO)

One key issue in the DEO case is the rate for the customer charge which covers costs for services such as meter reading, billing and maintaining the distribution pipeline. The company asked the PUCO to set its customer charge at $5.70. The PUCO staff recommended that DEO raise the fixed customer charge on residents’ bills to $17.50 per month, regardless of the amount of gas used. The OCC opposed this. Many consumers addressed this issue in their testimony at the public hearings.

“I’m outraged that the PUCO would even consider the new structure of these natural gas delivery charges. We’ve been wearing the sweaters. We’re insulating our homes. We’ve done all this, and now the gas companies want to punish us for conserving our usage.” - Karen Russell, Maple Heights

“A flat-rate charge will have much more of an impact on low-income consumers whose lifestyles are much different than those of higher incomes. They generally have smaller homes to match their smaller incomes, and to expect them to pay the same flat-rate as all consumers is not fair.” - Patty Spencer, Akron Summit Community Action Agency

“I’m for a fair profit, but not gouging the customer because they can. How long can (continued on page 2) we go on with increases in gasoline, taxes, school taxes? It seems like there’s no end. I have to live on a budget. Where can I go and ask for more income?” - Bill Dougherty, Louisville

“This year alone I’ve seen two people who had to make a choice between paying their utility bills and paying their mortgages.” - Anne Reese, Legal Aid Society of Cleveland

“I believe that if the proposed rate hike by Dominion is allowed to go through, many of our citizens will be very cold this winter, or worse yet, they could lose their homes due to fires caused by make-shift heating. - Mary Anne Williams, Marietta

“I support the position of Ohio Consumers’ Counsel particularly in the area of the flat-rate customer charge. It negatively impacts consumers who try to conserve, and subsidizes people who are high users.” - David Brightbill, Washington- Morgan Counties Community Action

Vectren Energy Delivery of Ohio

The customer charge is also a key issue for Vectren customers. The PUCO staff recommended the following increase to the fixed-rate, with a corresponding decrease to the cost based on customer usage:

Winter 2008-09 (Nov. 1, 2008 to Apr. 30, 2009): $16.75 per month
Summer 2009 (May 1 to Oct. 31, 2009): $10 per month
Winter 2009-10 (Nov. 1, 2009 to Apr. 30, 2010): $20.04 per month
Summer 2010 (May 1 – Oct. 31, 2010): $11.96 per month

The OCC opposes this change in the rate structure. Here’s what customers had to say about this issue in local hearings:

“It’s a lot of money to pay when you’ve got no choice. It’s a lot for a flat-rate without using an ounce of gas” - Rita Sue Land, Washington Court House

“It seems like we’re being penalized for being economical.” - Bob Land, Washington Court House

“You are robbing your customers.” - Darlene Ferguson, Sidney

“I don’t see the justification for such a large increase to a rate that is fixed. The cost to move the gas hasn’t changed.” - George Keiter, Washington Court House

“Why would I turn the thermostat down?” - Linda Sanders, Sidney

Mohawk Utilities

In September 2007, Mohawk Utilities asked the PUCO for a 55 percent increase in water rates. The case has since been settled with intervening parties agreeing to cut the amount of the rate increase. Residential Mohawk customers will pay a flat-rate of $11.81 per month if they use less than 500 gallons of water per month. If they exceed this amount, they will be assessed a $5 customer fee in addition to charges based on their water usage. Here is a sampling of customer testimony from that case:

“We’re paying way too much money for our water … you guys are taking advantage of us and it’s time to give us a break.” - Joshua Lipford, Malvern

“There was a time where we had good water at a good price, but that’s history. We first lost the quality, then we lost the price.” - Glenn Wiley, Malvern

Ohio American Water

Ohio American Water asked the PUCO to raise overall rates for residential water customers in Franklin and Portage Counties by 30 percent and by 12 percent for all of its other residential customers. An agreement among all parties was filed with the PUCO in early September and approved by the PUCO in November. Under the terms of the agreement, water quality and customer service should improve and the company will increase rates.

Four public hearings were held by the PUCO. Examples of testimony provided by OAW customers follow:

“I have a bill here…One month; $178.94, for one month’s worth of water. For what? The water still smells. The water is not drinkable.” - Emma Johnson, Galloway

“I don’t understand why we are continually having to come back and beg you (PUCO) to help us stop Ohio American Water from continuing to taking advantage of us.” - Lynn George, Westerville

“[T]he water has been disgusting. The pressure is not there. It smells of chemicals. It tastes bad. Ohio American has not done anything since the last time. No way they should get an increase of 33 percent for this time.” - Scott Holland, Galloway

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PUCO issues decision in Dominion East Ohio distribution rate case

With an Oct. 15 ruling from the Public Utilities Commission of Ohio (PUCO), Dominion East Ohio Gas (Dominion) customers will see in their bills, a higher customer charge and increased rates. The ruling, however, reduces by more than half, what Dominion initially requested but allows most of the increase to be collected through a flat-rate customer charge that the OCC opposed.

Dominion originally sought an annual revenue increase of $75 million. On Aug. 22, parties in the case reached an agreement lowering this amount to $40.5 million per year for the next three years. In their final decision, PUCO commissioners decreased the yearly rate hike to $37.5 million over three years, acknowledging that customer response to the proposal contributed to the lowering of the final amount. An estimated 175 customers testified during local public hearings and others wrote to the PUCO about the negative impact the proposed hike would have on them during troubled economic times.

Also included in the agreement:

$5.6 million per year will be added to funding for Dominion’s energy efficiency programs;
For customers earning 175 percent of the federal poverty level or less, who are not enrolled in the Percentage of Income Payment Program, Dominion will provide a $4 monthly discount. This one-year pilot program will be available to 5,000 eligible customers; and
A reduction from eight to five the number of years customers will pay an additional cost for upgrading Dominion’s pipeline infrastructure.

“We’re pleased, that through this joint agreement, we are able to reduce the requested rate increase by more than 50 percent and develop energy efficiency programs that provide opportunities to help customers to save on their gas bills,” said Janine Migden-Ostrander, Consumers’ Counsel.

The OCC, however, objected to changes in the flat-rate charge. The PUCO ruled that the current monthly flat-rate charge will increase from $4.38 (in western Ohio) or $5.70 (in eastern Ohio) to $12.50 in the first year, with a corresponding reduction in the usage-based portion of the gas bill. In the second year, this charge will increase to $15.40.

“Loading more of Dominion’s delivery costs into the flat-rate charge limits the ability for consumers to control their monthly bills and impacts their ability to conserve,” Migden-Ostrander said.

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OCC in your corner: Rate increase for Mohawk water customers cut in half

The work of the Office of the Ohio Consumers’ Counsel (OCC) and efforts of Mohawk Utilities customers to object to the company’s requests to raise water rates resulted in a favorable outcome for residents.

The OCC, the Lake Mohawk Water Rate Committee, staff of the Public Utilities Commission of Ohio and Mohawk Utilities reached an agreement in August reducing a requested 55.5 percent water rate increase by more than half.

The average residential customer who uses 3,551 gallons of water will see their bill increase to $38.66 also, an increase of $6.68 per month. Under the agreement, customers will also avoid a 300 percent increase in the monthly customer charge. Additionally, customers who use less than 500 gallons of water per month will be charged a low-usage, fl at-rate of $11.81 per month.

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Ohio American Water consumers face rate hike and improved services

Ohio American Water (OAW) customers should see improvements in customer service and water quality as a result of an agreement reached between the OCC, the company and others. As a result of the agreement approved by the Public Utilities Commission in November, water and wastewater costs will increase for all customers of OAW.

Rates will increase by just over 11 percent for customers in portions of Ashtabula, Lawrence, Marion, Morrow, Pike, Preble, Richland and Seneca counties while in Franklin and Portage counties rates will increase 30.37 percent. Wastewater rates also will increase by 36.94 percent. The customer charge will increase 10 cents to $9.51 per month.

OAW customers will receive the following benefits: Unless a customer owes more than $75 they will not be disconnected; more frequent communication about water quality, conservation and other general issues will occur; disconnection notices will be clearly identified; and a study to determine why water is lost and how to reduce it will be completed.

Also, improvements will be made in individual communities. An automated system to analyze water hardness every two hours will be installed in Lake Darby (Galloway). Marion customers will see damaged property restored in a timely fashion. Huber Ridge (Westerville) customers will continue to have treatment done to water for improved quality. OAW will be assessed with penalties if standards that were agreed to are not met.

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Incentives attractive for efficiency improvements

Energy efficiency has become an important factor as consumers struggle with their monthly budgets to keep utility bills manageable. With the passage of Senate Bill 221, Ohio now has an energy efficiency standard that utility companies must adhere to. As a result, more attention will be paid to efforts to use energy wisely.

Many consumers have already taken steps to make their homes more energy efficient, with the added emphasis on energy conservation. Utility companies throughout the state have sponsored programs that consumers can take advantage of. The Office of the Ohio Consumers’ Counsel (OCC) has assisted many electric and natural gas companies to make energy efficiency programs available for residential consumers.

Columbia Gas of Ohio

In July, the OCC negotiated with Columbia to provide customers with three new programs, and one that will be expanded beginning in 2009, to help reduce the need to use natural gas and potentially see savings on their bills. They are:

Home Performance Program: A certified contractor will analyze the home and identify areas where efficiency measures can be utilized. Incentives will be offered to customers who install recommended upgrades.
New Homes Program: Incentives will be offered to homebuilders to construct homes that are 50 percent more energy efficient than required by accepted federal standards.
Low Cost Product Rebates: Rebates will be offered to approximately 8,000 customers per year who install Energy Star programmable thermostats and low-flow showerheads.
Warm-Choice: Columbia will continue to offer and expects to expand this weatherization program to low-income customers.

Duke Energy Ohio

Duke Energy Ohio customers have had energy efficiency programs available to them since July 2007. Duke offers several options such as free home energy audits, rebates for appliance upgrades and other incentives to manage energy usage. Consumers can visit the Duke Energy website at www.duke-energy.com/ohio/savings.asp to learn more about these measures.

FirstEnergy

FirstEnergy customers have also had energy efficiency options available to them since 2007. The ENERGY STAR® with Home Performance program allows homeowners to get a home energy audit at a reduced price. A certified contractor will analyze the home and recommend steps to improve efficiency. There are up to $1,250 in incentives for improvements made once an audit is completed. For more information, call toll free 1-866-728-3594 or visit www.firstenergyhomeperformance.com.

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Consumer alert: Review telephone bills for unfamiliar charges

Consumers are encouraged to examine their local telephone bills to find out if they are paying for products or services they never intended to purchase.

The Office of the Ohio Consumers’ Counsel (OCC) issued a similar warning in June 2006 after consumers throughout the country noticed charges on their telephone bills for services such as enhanced voicemail, emergency roadside assistance or Web page hosting. Customers claimed they never authorized the charges, some of which may have resulted from providing their telephone numbers and other personal information while browsing the Internet.

Since local telephone companies often have billing and collection agreements with other organizations, charges from third-party businesses may appear on customers’ bills.

Reading the fine print and understanding the details on utility bills is critical since consumers are often asked to provide personal information. However, if no disclosure is made anyone may become a victim of “cramming” which is unlawful and occurs when a company adds a product or service to telephone bills without authorization.

The OCC recommends the following guidelines for consumers:

Pay attention to the websites you visit and read the information associated with requests for personal information, including your telephone number.
Be careful of any “too good to be true” gifts since they may require the purchase of a membership or product;
Review your monthly telephone bills for names of companies you do not recognize. In addition, look for mysterious charges that relate to an extra service or feature that you never ordered or accepted;
Call your local telephone company and the company providing the service if you have questions or need to dispute a charge. Ohio’s Minimum Telephone Service Standards require contact information for third-party companies to be included on bills;
Ask your local telephone company if it will “recourse” the disputed charges, which would remove them from your bill. However, the third-party company that added the charge to your local telephone bill may still try to bill you directly;
Some local telephone companies offer a way for customers to block charges from third-party companies. The OCC has learned that AT&T, Cincinnati Bell, Embarq and Verizon offer ways to block miscellaneous charges. While these blocks may not be 100 percent effective, they can prevent most unauthorized charges.

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