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Ohio Advocate Loses Duke Rate Challenge, Still Fighting Vectren

The Ohio Office of Consumers' Counsel (OCC) lost its battle to reverse a Public Utilities Commission of Ohio (PUCO) decision allowing Duke Energy Ohio (DEO) to recover a greater share of its delivery costs through fixed charges and rely less on volumetric charges. The OCC is continuing to fight a similar move by Vectren Energy Delivery of Ohio

The OCC alleges that if allowed to stand the May decision will increase the flat-rate customer charge by more than 300% over the next year (see NGI, June 30).

"By loading many of Duke's costs in to the flat-rate customer charge, the PUCO is taking away incentives for residents to be energy efficient at a time when household budgets are strained and tools are needed to help lower their monthly bills," said Consumers' Counsel Janine Migden-Ostrander. "This does not make sense."

The PUCO order raises the fixed monthly charge from $6 to $15 through September. At that point, consumers will pay $20.25 per month through June 2009, and $25.33 in every month after that, according to the OCC.

"The result of the PUCO's decision may cause residents living in small homes to subsidize those in large luxury homes for the delivery portion of their bill. The PUCO's decision means customers will pay these higher flat-rate amounts every month whether they use any natural gas or not, and whether they conserve or not."

In the Vectren case, the OCC said the rate shift -- approval of which has been recommended by PUCO staff -- would raise fixed charges from $7 to $16.75/month during winter months while lowering the volumetric charge. A $10 fixed charge would be in effect during the other months, May-September. "Overall, Vectren is requesting a rate increase of $27 million, and the OCC believes it should only be $3 million," the consumer advocate said last Thursday.

Raising the fixed charge has a disproportionate impact on low-income and low-usage customers, the OCC said. "Not only does this approach discourage residents from conserving energy, but research supports the conclusion that the low-income and elderly population will be put more at risk by adopting this approach," said Migden-Ostrander.

As part of its testimony filed with the PUCO, the OCC also is seeking the availability of additional payment arrangements for Vectren customers having difficulty paying their bills.

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