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Ohio Gearing Up for Electric Restructuring

Ohio Gearing Up for Electric Restructuring

Electric restructuring is almost a reality for Ohio consumers statewide as American Electric Power's (AEP) transition plan and Monongahela Power's plan were approved by the Public Utilities Commission of Ohio. AEP's and Monongahela's Ohio customers will now join the customers of the other three utilities in enjoying the freedom of choosing their electricity supplier, with service starting as early as Jan. 1.

"This order provides an opportunity to jump start the market by providing the resources for retail customers to begin to shop for competitive generation services," said PUCO Chairman Alan Schriber.

AEP Ohio President Floyd Nickerson said, "For the most part, we're pleased with the approval. However, we disagree with the PUCO's treatment of the gross receipts tax, and we will be asking for a rehearing on this issue.

AEP Spokesperson Deb Strohmaier explained the tax dispute, "We believe as it stands right now, the rule, and the order, and the way the law is written, that there would be a double collection on the gross receipts tax. We disagree with the commission on that; $97 million is what we would have to eat, if that stands."

AEP's Columbus Southern Power Co. and Ohio Power serve 1.3 million electric customers. In May, the company reached a stipulated settlement agreement with intervenors. Terms of the stipulation agreement provide for extended rate freezes through 2005 or the end of the market development period, rate reductions of 5% for residential customers as of Jan. 1, and other conditions expected to increase the savings of commercial and residential customers.

PUCO also approved Monongahela's plan on the one year anniversary of the date Ohio's electric restructuring bill took effect. The approval signified the fifth and final approval necessary for electric choice to take place. Like the other plans, stipulations provide for a 5% rate reduction and rate freezes through the end of the market development period.

"This Commission order, and the four that proceeded it, provide for an environment that will create a retail market and provide opportunities for customer savings beginning January 1, 2001," said Schriber.

PUCO already has approved plans from Cincinnati Gas & Electric, Dayton Power and Light, and First Energy. All of the companies' electric deregulation plans begin on Jan. 1.

PUCO spokesperson Beth Gianforcaro said billboards are already going up, and the consumer education effort will begin in mid-to-late October. She also said that marketers have started submitting for certification, "probably about three or four." Certification of marketers is PUCO's next priority, she added.

Alex Steis

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