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Budget cuts force OCC to close call center, reduce services

The new state budget, enacted July 1, has meant a sharp reduction to the advocacy and customer services that the Office of the Ohio Consumers' Counsel (OCC) provides.  The OCC’s budget cuts total more than 50 percent over the next two years and have resulted in the closing of the OCC’s call center and scaling back of legal, analytical, and outreach and education efforts.

The budget bill reduced the OCC’s budget from $8.5 million in the last biennium to $5.6 million for the current fiscal year, and by an additional $1.5 million to $4.1 million, effective July 1, 2012. The cuts went into effect despite the fact that the OCC is not funded by the state’s General Revenue Fund and the reductions did not help to resolve Ohio’s multi-billion dollar budget deficit.

The cut to the OCC budget was the deepest in the 35-year history of the statewide residential utility customer advocate, which represents 4.5 million households in matters related to their electric, natural gas, telephone and water services.  The Legislature acted despite an outpouring of public support on behalf of maintaining the agency’s funding at previous levels.

For an annual cost of $8.5 million, the OCC was able to save customers in the last fiscal biennium more than $55 million due to its individual efforts and more than $2 billion from the agency’s work with other groups. Since 1976, the OCC has saved all utility customers $10 billion in higher utility prices.

The most immediate effect of the budget reductions was the closing of the OCC’s call center, which for 35 years had assisted individual utility customers with complaints and concerns and provided valuable information. Customers with complaints about their utility services who call the OCC’s toll-free number, 1-877-742-5622, are being directed to contact the Public Utilities Commission of Ohio (PUCO).

In other critical areas, the OCC also has been forced to cut back. Due to the downsizing of the agency, which has resulted in a reduction of staff from 82 to 42 employees (five of whom are part-time), the OCC has been compelled to reduce the number of cases in which it is involved. The agency will withdraw from a number of cases currently before the PUCO. In other cases, the OCC will take limited or no further action. Going forward the OCC will intervene in cases based on the anticipated impact to the highest number of customers and largest dollar amounts, taking into account its available resources. The OCC may no longer be able to intervene in some cases to protect the public interest as it has traditionally done, because of lost resources.

Customer outreach and education efforts have been significantly affected by the budget cuts. For many years, the OCC has worked throughout Ohio to inform and educate residential customers about complicated and oft-changing utility issues. Through its Speakers’ Bureau, the OCC reached thousands of customers, offering presentations about energy efficiency, natural gas choice, impending legislation in the telecom and gas industries and changes to the Percentage of Income Payment Plan (PIPP), among many other subjects.

For many years, the OCC's Consumers’ Corner newsletter has been distributed to more than 100,000 households both electronically and by mail. The OCC plans to continue to publish Consumers’ Corner on a bi-monthly basis but in an electronic format only, due to the budget cuts. This method reduces the OCC's ability to reach consumers without computer access due to lack of broadband availability, affordability issues or other reasons. Consumers can receive the e-newsletter, as well as other popular OCC fact sheets and publications, by subscribing to our email service or by downloading them from our interactive website, pickocc.org.

The OCC also has actively worked in collaboration with social service agencies to ensure that income-eligible Ohioans had access to payment assistance programs in an effort to avoid electric or natural gas service disruptions during the winter or summer months.

The original budget proposal that Gov. John Kasich submitted to the Legislature included a 51.3 percent cut to the OCC’s operations during both fiscal year 2012 and 2013. The Ohio House agreed to this reduction but the Senate restored funding during the first year so that the OCC could pay several one-time expenses and avoid even deeper staff cuts.

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Yearlong utility problem fixed after one call to OCC

After experiencing difficulty with a local utility for more than a year to resolve a dangerously low-hanging electric line, a central Ohio customer was able to get the line in front of his home fixed with one contact to the Consumer Services Division of the Office of the Ohio Consumers’ Counsel (OCC).

Neil Aring, of Galena, had tried numerous times to have American Electric Power (AEP) repair an electric line that had sagged within eight feet from the ground. After his personal attempts to get the issue resolved did not work, Aring called the OCC after reading about the agency in the news.

“I knew the OCC existed but I really wasn’t aware of it,” he said. “When I read about the OCC budget issues, I knew right away they were who could help me.”

Within a day of contacting the OCC, Aring received a call from AEP.

“I immediately got a call from AEP saying they had a work order in and they would fix it,” Aring said.

The line problem that had tormented Aring for more than a year, and some of his neighbors even longer, was fixed within two weeks of contacting the OCC. “The fix was really quick; really amazing.”

OCC call center closed after 35 years of operations: The assistance provided to Aring was one of the final actions taken by the OCC’s Consumer Services Division before it was forced to close July 1 because of significant cuts to its budget. Since 2008, the OCC aided 3,500-5,500 customers per month and helped more than 1,300 customers avoid disconnection or have their utility service restored.

Unfortunately, the OCC will no longer be able to assist Ohio customers with their utility complaints. Customers with complaints about their utility services who call the OCC’s toll-free number, 1-877-742-5622, will be directed to contact the Public Utilities Commission of Ohio or their legislator.  Additional information about the OCC and its advocacy efforts is available at pickocc.org.

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Two OCC publications earn recognition of excellence

The 2009 annual report to the Ohio Legislature of the activities of the Office of the Ohio Consumers' Counsel (OCC) and a handbook illustrating Ohio's solar energy potential and how residential customers can use it have each earned prestigious awards for the agency.

The OCC was presented with the Bronze Quill Award for "Excellence in Communications" by the Columbus chapter of the International Association of Business Communicators (IABC) for its 2009 Annual Report to the Ohio Legislature. It was the second consecutive year the OCC has won this significant accolade. IABC is the international informational network for communications professionals.

Each year the OCC is mandated by statute to present an annual report to the Legislature, which is its primary audience. However, the OCC also develops the document as a means to inform other public officials, consumer groups, residential utility customers, the news media, Ohio libraries and website visitors about the OCC's utility advocacy. In addition to meeting its statutory requirement, the OCC's primary goal is to raise public awareness of its role as Ohio's residential utility customer advocate with understandable articles and an easy-to-follow design.

The OCC was also recognized in May by the American Library Association for its publication, Solar Makes Cents, A Residential Consumer's Guide to Harnessing the Sun's Energy. The 25-page handbook, developed during 2010, includes information for customers about how to use a solar energy system in their homes, access local, state and federal incentives and financing to install a system and the advantages to homeowners from energy savings and increased property values.

Solar Makes Cents was nominated by the State Library of Ohio and selected by the American Library Association Government Documents Round Table Publications Committee as a Notable Government Document in the state government category.   Notification of the publication's selection as an award winner was published in the May 15, 2011 issue of Library Journal.

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Summer Assistance Programs

The seemingly unending dog days of summer and the around-the-clock need for air conditioning and fans can result in many Ohioans questioning how they are going to be able to pay their next electric bill. There is comfort knowing that thousands of income-eligible customers may be able to obtain cooling assistance through the Home Energy Assistance Program (HEAP) Summer Crisis Program. This federally funded program is administered by the Ohio Department of Development, and benefits are distributed through local community-based organizations.

Summer Crisis Program assistance is available between July 1, 2011 and Aug. 31, 2011. To qualify for the program, the total household income must be at or below 200 percent of the federal poverty guidelines.  For a family of four, this means an annual household income at or below $44,700 could obtain cooling assistance.  In addition to the income guidelines, the household must include a member who is at least 60 years old, or have medical needs that can be documented by a physician. Further information about the Summer Crisis and other assistance programs can be obtained at pickocc.org.

Summer Crisis Program benefits include a one-time payment of up to $175 to help maintain electric service and/ or supply a fan or air conditioning unit, subject to availability. Unlike many of the other assistance programs, customers do not need to have a disconnection notice to be eligible. The Ohio Department of Development can be contacted at 1-800-282-0880 or TDD 1-800-686-1557 to locate the closest community agency that is enrolling customers in the Summer Crisis Program.

In addition to the Summer Crisis Program, many electric utilities offer funds to help income-eligible customers maintain service. Customers also can contact their local job and family services office and other community organizations to determine if other sources of assistance may be available.

 

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OCC victories could lead to refunds, rate reductions for AEP customers

Only a few weeks remain for the Ohio Consumers' Counsel (OCC) to make arguments for what it believes is a significant refund due back to American Electric Power (AEP) customers.

In June, the OCC made recommendations to the Public Utilities Commission of Ohio (PUCO) that would benefit customers by more than $787 million. The proposals followed the agency's victory at the Supreme Court of Ohio. The Court agreed with the OCC in April that AEP improperly charged customers for several expenses in the utility's current rate plan. The case was sent back to the PUCO for reconsideration.

After an evaluation of additional testimony filed by AEP, the OCC determined the utility still has not proven it incurred any actual costs as a result of providing backup power for customers who shop for electricity providers or that carrying charges on environmental investments made prior to 2009 should be allowed.

If the PUCO makes a decision by October that follows the OCC's recommendations:

• The average Columbus Southern Power residential customers' bills would be reduced by $5.48 per month. The average Ohio Power residential customers' bills would be reduced by $4.58 per month. The reductions would be reflected on customers' bills from October-December;

• $87 million plus interest would be returned to customers for charges collected between June and September; and

• $634 million already collected would be used to pay down fuel costs that were delayed for collection from 2012-2018.

Arguments were scheduled to conclude in mid-August. The PUCO will then make its decision based on the information submitted in the case.

OCC seeks additional refunds: The OCC, along with other consumer groups, also called for a refund of $23.7 million, plus interest, for costs AEP collected for a new power plant it never built.

Five years ago, AEP received approval from the PUCO to collect certain costs for the construction of a power plant that would convert coal into synthesized gas for use in producing electricity. The PUCO said AEP's research and preconstruction costs would be subject to audits and that all charges collected would be refunded to customers, with interest, if AEP did not start construction within five years of the Commission's Entry.

Customers paid for research and preconstruction costs for 12 months, ending July 2007, for the proposed 629-megawatt power plant.  The OCC appealed this case, along with an industrial group, and the Supreme Court of Ohio reversed the Commission's decision on March 13, 2008, returning the matter to the PUCO for reconsideration.

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OAW proposes 19 - 26 percent increase in water rates for residential customers

Ohio American Water (OAW) has notified the Public Utilities Commission of Ohio (PUCO) that it intends once again to file for a rate increase that would affect all of its customers. The water utility wants to increase rates for its water customers between 19 percent and 26 percent. Wastewater rates for Franklin County customers also are proposed to increase by more than 11 percent.

OAW asserts that it is asking for the increase because of ongoing infrastructure improvements it has made across the state. In a press release, OAW said it has invested $27.5 million in water and wastewater infrastructure since Dec. 31, 2008.

In the July 1 notice, OAW estimated its proposal would increase the monthly bill for the typical residential customer as follows:

Typical Monthly Water Bill for an OAW Residential Customer (based on 5 Ccf)*
Service Territory	Current Bill	Proposed Bill	Monthly Increase	Annual Increase	Percent Increase
Marion (w/ softening)	$41.12	$49.79	$8.67	$104.04	21.08%
Ashtabula, Tiffin, Lawrence County, Lake White	$39.36	$47.65	$8.28	$99.36	21.04%
Blacklick, Timberbrook, Portage	$38.22	$47.65	$9.43	$113.16	24.67%
Lake Darby, Worthington Hills	$41.09	$51.65	$10.56	$126.72	25.70%
Huber Ridge	$45.71	$54.73	$9.02	$108.24	19.74%
Franklin County Wastewater	$44.18	$49.31	$5.13	$61.56	11.60%
*Chart developed from calculations provided by OAW in its July 1 pre-filing notice to the PUCO, Case No. 11-4161-WS-AIR.

This proposal is the seventh rate increase request OAW has made since 1999. Because of budget cuts, the OCC may not have the resources to intervene as it has historically done.

Aqua America to acquire OAW: In other news, Aqua America Inc., which has operations in Ohio, came to an agreement to purchase OAW from its parent company, the American Water Works Co. The deal was announced July 11 and would result in the American Water Works Company purchasing Aqua America's New York operations in exchange for American Water's Ohio business. 

The agreement must be approved by respective state regulatory authorities in New York and Ohio before the purchase can be completed. The sale of OAW to Aqua America would increase Aqua Ohio's total customers to about 145,000. It is not expected that this transaction will impact OAW's rate increase request.

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Duke proposes 10-year rate plan

Duke Energy Ohio filed a new proposal (Case No. 11-3549-EL-SSO) to price electric generation, beginning January 2012, after its initial plan was rejected by the Public Utilities Commission of Ohio (PUCO).

According to Duke, its proposed electric security plan “unbundles generation service by separating capacity (physical assets) from energy (the actual output)” and provides that “customers would pay for capacity through a non-bypassable, cost-of-service-based charge, while energy would be priced and purchased through a competitive auction.”

Since Duke would not use the power its generating plants produce to supply customers under its plan, it proposes to split the net proceeds from the energy sales from those plants between customers and the utility. 76 percent would go to the customers and 19 percent to Duke. The utility also proposes to use the remaining five percent of the profits from energy sales to encourage economic development in southwest Ohio.

Other key elements of Duke’s electric security plan include:

• A PUCO review of the 9-years and 5-months plan in 2015 and 2019 to determine if it is still the more favorable option as compared to a market rate offer;

• An excessive earnings test every four years, as required by law, for the duration of the plan;

• All customers, regardless of who they buy electricity from, would pay for costs associated with Duke’s renewable energy requirements; and

• A charge that would allow Duke to collect costs for distribution investments.

The Office of the Ohio Consumers’ Counsel (OCC) is currently in the process of reviewing the proposal to ensure it is fair and reasonable for residential customers. Nevertheless at this juncture, the OCC has some major concerns about the ultimate price tag for customers associated with this plan.

Ohio law gives the PUCO 275 days to decide this type of case. Duke has asked for a ruling before the end of the year.

The PUCO has set up four public hearings for Duke customers to testify about the utility’s proposal and the effect it would have on their budgets. The local public hearings are scheduled for:

• Tuesday, August 30 at 12:30 p.m.
  Cincinnati State Technical and Community College
  Main Building, Room 342
  3520 Central Parkway
  Cincinnati, Ohio 45223

• Tuesday, August 30 at 6:30 p.m.
  Union Township Civic Center Hall
  4350 Aicholtz Road
  Cincinnati, Ohio 45245

• Thursday, September 8 at 6:30 p.m.
  Middletown City Building, Council Chambers
  1 Donham Plaza
  Middletown, Ohio 45042

• Friday, September 9 at 12:30 p.m.
  Cincinnati City Hall, Council Chambers
  801 Plum Street
  Cincinnati, Ohio 45202

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Renewable energy incentive programs now available for AEP customers

Renewable energy projects will be more affordable for American Electric Power (AEP) residential customers after two programs were approved by the Public Utilities Commission of Ohio (PUCO) in June.

The OCC played an important role in the creation of the programs to provide easier ways for residential customers to make investments in renewable energy after the Ohio Legislature created a policy in 2008 to advance the use of solar, wind and other renewable energy sources in the state.

One program offered by AEP will allow customers who already own wind or solar power to sell their renewable energy credits (RECs) to the utility. Under Ohio law, AEP must meet certain benchmarks for renewable energy. The other program will give customers who want to install wind or solar power an upfront payment to help offset the initial cost in exchange for their RECs. Each program has been initially approved to last for two years.

“These programs are great opportunities for residential customers to take advantage of renewable energy or get more out of the systems they already have,” Consumers’ Counsel Janine Migden-Ostrander said. “The OCC has advocated for these types of residential programs for years and is glad AEP is now able to offer them to its customers.”

The renewable energy credit purchase program for existing renewable energy owners will allow customers to sell whole RECs (1,000 kilowatt-hours per REC) to AEP. Any partial REC will be rolled over into the following year for collection. Renewable energy credits for solar energy will be purchased by AEP for $300 per REC through 2011 and $260.50 per REC for 2012 and 2013. Wind energy RECs will be purchased for $34 per REC through the two-year program. The average residential solar facility produces 3.4 RECs per year. The average residential wind facility produces 15.6 RECs per year.

The upfront renewable energy incentive program is available for new solar and wind energy projects. Customers who utilize the program will be paid $1.50 per watt for solar projects or 27.5 cents per kilowatt-hour for wind projects and agree to assign the RECs created to AEP for 15 years. The maximum incentive for each residential customer is $12,000 for solar projects and $7,500 for wind projects.

A total of $2.5 million in incentives is available for Columbus Southern Power and Ohio Power customers for the two-year program.

Customers can either own or lease a renewable energy project and still be eligible for the programs. The renewable energy project must be interconnected to AEP’s electric grid and certified by the PUCO.

Renewable energy credit programs also are available for Duke Energy Ohio customers through December 2012 through a program negotiated by the OCC.

For more information about solar energy projects, customers may view a copy of the OCC’s award-winning “Solar Makes Cents” handbook available online at pickocc.org. The OCC also offers comprehensive information on the different types of renewable energy, RECs the other important aspects of utilizing renewable energy in Ohio.

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New and updated information available on OCC website

Residential electric utility customers now have more options as independent suppliers are competing with Ohio’s traditional providers to offer generation service to power their homes. The Office of the Ohio Consumers’ Counsel (OCC), as part of its mission to inform and educate customers about available utility choices, recently developed a fact sheet, Comparing Your Electric Choices.

It includes rates per kilowatt hour (kWh), contract terms and offer details for customers of FirstEnergy, Duke Energy Ohio and Dayton Power & Light and defines terms and ways to compare costs with those of the utilities.

The OCC also has updated the following fact sheets, available at pickocc.org:

Electric service and safety standards – provides electric customers with information about how to establish service, access bill payment plans and avoid disconnections. Metering issues, outages and registering complaints are also discussed;

 

Summer Power Outages – includes safety measures and instructions for customers to follow during outages which occur during electric storms or heavy demand during periods of extreme heat. Customers with medical needs are advised to have contingency plans in the event of a power emergency. Common myths about power outages are also clarified;

Utility Line Warranties – informs customers of what to consider when deciding to purchase a utility warranty program. Customers are educated about how to determine which lines in and around their homes are their responsibility to repair and which are those of the utility. Line warranties for electric, natural gas, telephone and water are defined and cost considerations are discussed;

Basics of Renewable Energy Credits – defines the origins, different types and qualifications to receive credits for customers who choose to use renewable energy sources to power their homes. The standards for what qualifies as a renewable energy credit (REC) were developed by the Public Utilities Commission of Ohio (PUCO) after the passage of Ohio’s electric energy law;

Customer Guide to Improving Home Energy Efficiency – offers numerous tips for customers about home weatherization, from sealing windows and doors to efficient use of heating and cooling equipment. An “Energy Savings Potential from Energy Efficiency and Conservation” chart also is included.

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