Office of the Ohio Consumers' Counsel

Media Center

Contact: Ryan Lippe
(614) 466-7269

Consumers’ Counsel recommends changes to Dayton Power & Light’s proposed rate plan

COLUMBUS, Ohio – January 26, 2009 – The Office of the Ohio Consumers’ Counsel (OCC) is filing the testimony of its expert witnesses today at the Public Utilities Commission of Ohio (PUCO) challenging Dayton Power & Light’s (DP&L) proposed Electric Security Plan. In its filing, the OCC offers recommendations that would provide significant benefits to DP&L customers over at least the next three years.

The OCC is also filing a request for the PUCO to hold local public hearings to provide consumers a chance to speak out about DP&L’s proposed new programs and rates. The OCC recommends a day and evening hearing in Dayton as well as evening hearings in Washington Court House and Wilmington.

“The OCC supports the concepts in many of DP&L’s proposals, such as building a more advanced electric system and offering energy efficiency programs, however DP&L’s proposed costs are higher than what customers should reasonably be expected to pay,” said Janine Migden-Ostrander, Consumers’ Counsel. “In addition, we want to ensure that the maximum cost savings are achieved, which should be shared with residential consumers through lower rates.”

The OCC’s filing includes the following recommendations to DP&L’s case:

Eliminating additional fuel cost charges. DP&L proposed to defer additional fuel costs and collect them from customers at a later time, at a 13.32 percent rate of interest which includes a profit. The OCC believes that current rates, including increases already experienced by customers, compensate DP&L for fuel costs through the end of the current plan on Dec. 31, 2010, and that additional charges combined with the interest rate are excessive. The OCC argues that DP&L should not earn a profit in carrying charges.
Reducing the cost to residential consumers of discounts provided to large energy users. DP&L proposes to force customers to make up for an entire discount provided to some large customers. The OCC recommended that 50 percent of the discounts be absorbed by the utility and its shareholders as has been the case historically. DP&L wants customers to pay for $3 million in discounts beginning April 2009, regardless of whether any of the discounts have been provided. In addition, the OCC found that DP&L’s proposal failed to include a component required under PUCO rules that would pass through any savings to customers as a result of the discount programs.
Minimizing the administrative and marketing costs of energy efficiency programs. The OCC’s experts found that DP&L would spend approximately 44 percent of total residential energy efficiency program costs on marketing and administrative expenses. The OCC recommends that these costs be reduced to no more than 25 percent of each program’s total program costs, leaving significantly more funds available for direct energy efficiency incentives to customers.
Offering all customers weatherization opportunities. The OCC recommends that all customers, regardless of income, be eligible for incentives through a home performance program. The services would be competitively bid to ensure the lowest costs and optimal benefits. The bidding would also create economic development benefits in the Miami Valley and the state of Ohio.
Lowering expenses for advanced metering and Smart Grid initiative. The OCC supports the consumer benefits obtainable through advanced metering and Smart Grid programs. It maintains that DP&L’s proposed costs are excessive. Testimony revealed that DP&L has more than doubled the typical total costs needed to initiate advanced metering and has minimized the operational benefits that would be achieved by these projects. While the utility projects $80 million in benefits, OCC’s experts believe it is reasonable to expect $500 million to $700 million in operational benefits, which would reduce the costs customers would have to pay.
Adding new customer rate options. The OCC recommends that DP&L be required to offer an array of programs that can help customers save on their electric bills by voluntarily shifting their usage to times when the price of electricity is cheaper.
Introducing new incentives for consumers to generate renewable power. The OCC recommends a program to provide an incentive to customers who invest in a renewable energy project. Through a standard renewable energy certificate purchase program, customers with a system to produce renewable energy would receive payment by DP&L for their project’s positive environmental and social attributes. This, in turn, would help DP&L meet its renewable energy requirements under Ohio’s electric policy law.

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 Web site at www.pickocc.org.