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Dominion East Ohio’s flat-rate charge to increase 250 percent

Customers to see smaller increase than originally proposed by DEO

COLUMBUS, Ohio — October 15, 2008 — corrected version — Customers of Dominion East Ohio Gas will see a higher flat-rate charge and increased rates after the Public Utilities Commission of Ohio (PUCO) ruled today on the company’s rate increase request. Dominion will increase rates by less than half of what it requested, as a result of an agreement between it, the Office of the Ohio Consumers’ Counsel (OCC) and the PUCO staff. Customers will see an increase of $37.5 million but it will be mostly collected through a 250 percent higher flat-rate charge that the OCC opposed.

The OCC, PUCO staff, Dominion East Ohio and other interested groups came to an agreement in August to lower the company’s original $75 million request by $34.5 million. In addition, Dominion will increase funding for energy efficiency programs from $3.5 million per year to $9.5 million per year.

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

While agreeing to the level of new rates, the OCC did not agree to changes in the flat-rate charge. This higher flat-rate charge, which includes a corresponding smaller volumetric charge, was not originally requested by Dominion but was recommended by the PUCO staff. The increase in the customer charge disproportionately impacts low-income customers in smaller homes and lower-usage residential customers who try to be energy efficient. Based on today’s order, customers in a one-bedroom apartment would pay close to the same amount as those living in a five-bedroom house. The OCC believes this is unfair and unreasonable.

“Loading more of Dominion’s costs into the flat-rate charge limits the ability for consumers to control their monthly bills and is not the best opportunity for consumers to conserve,” Migden-Ostrander said.

With this PUCO ruling, customers will see their current monthly flat-rate charge 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 would increase to $15.40. Dominion will have to provide a review of this rate structure in order to be able to continue it beyond the first two years.

There will be some relief for low-income customers. For customers who earn 175 percent of the federal poverty level or less and are not enrolled in the Percentage of Income Payment Program, Dominion will provide a $4 monthly discount. This pilot program will be made available for one year to the first 5,000 eligible customers.

Dominion also sought to charge customers for a pipeline replacement program at a cost of $2.6 billion over 25 years. The agreement limited the program to an initial five-year period and Dominion can charge customers no more than $1.12 per month for the first year and an additional $1 per month per year for the remaining four years. It will have to get PUCO approval to continue the charge after five years.

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.