In accordance with Ohio’s electric industry competitionlegislation, Cinergy’s Cincinnati Gas & Electric Co. (CG&E)filed its transition plan with the Public Utilities Commission ofOhio (PUCO) yesterday. The plan extends a six-year rate freeze foranother six years, but also requests that the utility recover itsstranded costs through the frozen rates. Overall, the utility,which serves 650,000 electric customers in southwestern Ohio, saidthe plan would cause a $77 million reduction on residentialcustomers’ bills. The new law requires PUCO to rule on the plan byOctober 31.

“Our rates today are lower than they were at this time fiveyears ago, due to reductions in fuel costs. In all likelihood,we’ll continue to have frozen rates for another six years, despitethe potential for substantial increases in environmental compliancecosts at our generating stations,” said James L. Turner, presidentof CG&E. “This plan is great news for our customers.”

The transition plan outlines the steps CG&E will take toprovide for customer choice beginning Jan. 1, 2001. Included inCG&E’s frozen rates are $927 million in certain transitioncosts, which will not result in higher rates for customers. Theutility hopes to recover all stranded costs by 2010.

“The transition costs are included in the rates customerscurrently pay,” Turner said. “Under our plan, these costs would berecovered under the frozen rates, while customers gain the benefitof the five percent generation rate reduction and the ability tochoose a competitive supplier in 2001.”

Besides transition costs, CG&E’s plan covers rate,implementation, customer education and corporate separation issues.Under the terms of the proposal, CG&E will be regulated toFERC-regulated transmission service and PUCO-regulated distributionservice. The utility will also comply with all code of conductprovisions to prevent any preference to any Cinergy affiliate overany other supplier. All of CG&E’s generation assets will betransferred to another Cinergy affiliate. The company does notpropose employee layoffs in its transition plan.

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