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Ohio Consumers’ Counsel presents evidence against Dominion East Ohio’s proposed rate increase

COLUMBUS, Ohio – June 23, 2008 – A rate increase request by Dominion East Ohio should be rejected because the utility has failed to prove it needs additional money from its customers, the Office of the Ohio Consumers’ Counsel (OCC), the residential utility consumer advocate, will say today in testimony to be filed at the Public Utilities Commission of Ohio (PUCO).

“In our tough economic times, the PUCO should be especially cautious about raising customer rates. Dominion has not justified its rate increase request, and consumers should not bear the burden of higher utility bills,” said Janine Migden-Ostrander, Consumers’ Counsel.

In August 2007, Dominion East Ohio requested to increase its base rates – the distribution portion of a customer’s bill that pays for services and pipes – by $75 million per year. 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. The cost of the natural gas itself is not part of this case.

Based on OCC’s review, Dominion East Ohio does not need a revenue increase. This can be attributed, in part, to Dominion asking for unreasonable profit level; differences in the methods of accounting for pensions and employee benefits; and other expenses for which customers should not have to pay through rates. These issues more than offset the increase the utility seeks for delivering natural gas to its customers.

The level of the flat-rate customer charge is a point of contention in the Dominion East Ohio rate case as it has been in similar cases dealing with the rates of Ohio’s major natural gas utilities.

The 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 (Northwest Ohio) and $5.70 per month (Northeast Ohio) as a flat-rate customer charge. The PUCO staff 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 service areas.

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 results 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 regardless of how much natural gas is used,” Migden-Ostrander said.

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,” said Migden-Ostrander. “Energy efficiency gets consumers the most benefits for their money.”

The OCC encourages individual customers to share their opinions with the PUCO by writing letters. 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.

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.