Wednesday, September 20, 2000

CG&E: Gas choice program differs from Ohio's electric selection plan

        Cincinnati Gas & Electric's gas choice program is similar, but not identical, to the electric choice program that takes effect in Ohio on Jan. 1.

        With marketer participation in the gas choice program down, some speculate there will be little choice when the electric deregulation program begins.

        But Steve Brash, CG&E spokesman, said there are significant differences in the natural gas and electric choice programs.

        For one, the electric deregulation law requires that at least 20 percent of the incumbent utility's customers must switch suppliers by the end of 2003, the midpoint in the five-year transition period.

        To encourage switching, CG&E's electric choice program, approved last month by state regulators, includes a 5 cents per kilowatt hour “shopping credit” to encourage residential customers to switch. The law allows state regulators to step in and increase the credit or take other steps to reach the 20 percent goal.

        The electric deregulation law also includes provisions allowing customers to aggregate their power demand — basically by forming buying pools.

        Customer buying pools, if they're large enough, should be able to attract suppliers offering lower electric rates.

        Robert Tongren, Ohio consumers' counsel, said the new electric choice program may actually cause some marketers to offer both electric and gas purchasing programs to attract customers.

        In Pennsylvania, electric customers have seen around 15 percent decline in electric rates.

        If those kind of savings can be duplicated in Ohio, electric industry surveys suggest customers will shop for new suppliers, Mr. Brash said. National surveys have shown that savings in the 5 to 7 percent range haven't been large enough to encourage shopping, he said.

— Mike Boyer

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