The Public Utilities Commission of Ohio (PUCO) modified a tentative agreement the unit of Cinergy Corp. reached in May with a dozen business and consumer groups.

"Unfortunately, the PUCO's required changes would result in a fundamentally different deal," said Greg Ficke, CG&E president.

In a unanimous decision Wednesday, the five-member commission said CG&E, whose electric rates have been frozen since 1994, would have to justify any residential rate increase when the rate freeze is slated to end in 2006.

The tentative settlement reached in May would have allowed CG&E to increase rates up to 6 percent annually, without prior commission approval, to recover increases in fuel, environmental costs, security and other items.

The commission also modified portions of the agreement dealing with non-residential electric rates, which will be unfrozen starting in January.

The company has 30 days to ask the commission to reconsider its decision.

Ohio Consumers' Counsel Janine Migden-Ostrander, who represents consumers before the commission, also plans to ask the PUCO to reconsider. She said neither the original order nor the PUCO decision were good for consumers.

If still not satisfied with the results of the rehearing, the commission's decision can be appealed to the Ohio Supreme Court.

As result of the commission's decision, CG&E said it was considering whether to go to a market-based rate scheme. The commission hasn't set rules for market-based rates.

Email mboyer@enquirer.com