By Mike Boyer
The Cincinnati Enquirer

Cincinnati Gas & Electric Co.'s plan to end its decade-old freeze on residential electric rates would mean higher electric bills for consumers and would not guarantee rate competition, Ohio's residential utility advocate says.

In a filing Tuesday, deputy Ohio Consumers' Counsel Eric Stephens said CG&E's plan unveiled in late January "would ensure company profits at the expense of residential consumers. The plans are unacceptable."

The consumers' counsel said CG&E's proposal, which must be approved by state regulators, could raise the generation portion of a consumer's monthly bill, which typically represents about two-thirds of the total bill, by as much as 40 percent over four years.

In addition, the counsel said the CG&E plan would allow it to continue collecting so-called "transition charges" from customers through the end of 2010, violating an agreement to stop collecting the charges by the end of 2008. These charges allow CG&E to recover the cost of moving to a deregulated market.

The consumers' counsel said the extension would cost residential customers an additional $100 million, or $4 to $5 more a month in 2009 and 2010.

"Residential consumers need protection against higher rates, not proposals that will significantly increase their monthly bills, fail to offer price stability and create a barrier to savings opportunities," Stephens said.

The counsel's response is the latest step in a year-old proceeding before the Public Utilities Commission of Ohio to decide how CG&E's electric rates will be determined after the current rate freeze ends under Ohio's 4-year-old deregulation law.

In January, CG&E, a unit of Cinergy Corp., proposed ending the rate freeze next year, a year ahead of schedule, in exchange for capping total rate increases at 7 percent through 2008.

CG&E, which has 640,000 customers in Southwest Ohio, proposed the rate cap as an option to its earlier proposal for a competitive-bid service rate option for customers who don't sign up with an alternative electric supplier.

The consumers' counsel said both CG&E proposals violate the electric rate restructuring agreement reached with the consumer advocate.

CG&E argued its proposal to cap the generation portion of customers' bills through 2008 would give customers some protection from higher rates while giving competition more time to develop.

The company, which hasn't had an electric rate increase in Ohio since 1994, argued it needs some rate relief to cover its investment in transmission and distribution and higher generation costs.

The utility said it has spent more than $700 million improving its transmission and distribution system in the last decade and $177 million on better pollution controls since 2000.

While the consumer price index has risen 26 percent in the last decade, CG&E said its average electric rate has declined.

The commission staff is to file its comments on the CG&E plan by April 8. A public hearing at Cincinnati City Hall is set for April 22, and the commission will begin its hearings on the plan April 26.

E-mail mboyer@enquirer.com