Thursday, December 30, 1999
CG&E rate cut too low, agency says
BY SPENCER HUNT
Enquirer Columbus Bureau
COLUMBUS — Cincinnati Gas & Electric's plan to transform itself from a monopoly into a competitive power company doesn't do enough to cut customers' monthly power bills, Ohio Consumers' Counsel Robert Tongren says.
Residential customers of the utility would save an average $2.30 a month starting in 2001 under a proposal that CG&E has filed with state regulators. Mr. Tongren's agency will argue that consumers are entitled to more savings when it files official objections with the Public Utilities Commission of Ohio (PUCO) next month.
“This is a very quickie review of an extensive document,” Mr. Tongren said Wednesday. “But we feel confident in saying there are some things that should be considered that weren't.”
Who pays old debt?
At the center of the issue are millions in old debts the state let CG&E incur while it was a monopoly and how they will be paid off after competition begins in 2001. A deregulation law that the legislature passed in the summer lets CG&E continue to collect on those debts, even from customers who choose to take electricity from CG&E competitors.
CG&E estimates its total transition costs at $927 million, plus $311 million in financing costs. Mr. Tongren says the estimates are too high and cost consumers too much.
“Our goal will be to whittle the transition charges down to the extent that it's what the company will use for what it needs to recover,” Mr. Tongren said.
The consumers counsel won't be able to offer a counter-estimate on CG&E's costs until shortly before it files its objections with state regulators Feb. 11.
Cinergy responds
CG&E is entitled to collect money to pay off loans used to build newer power plants, Mr. Tongren said. But he said those debts should be diluted by revenues from older power stations consumers have already paid off.
Mr. Tongren said the counsel also will argue for a bigger monthly rate cut. He said the way the utility computed its costs waters down a mandatory 5 percent rate cut for residential customers that lawmakers passed last year.
Steven Brash, a spokesman for CG&E's parent company, Cinergy, said the utility's estimates already reflect its actual costs. He also disputed Mr. Tongren's claim that older power stations should be used to pay off newer ones.
The PUCO won't issue a ruling in the case until after March 27, when public hearings and reports are complete.
The state's job is further complicated by the fact that Ohio's four other major utilities are filing similar plans. Those plans are likely to face similar objections.
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