The Cinergy Corp. unit outlined the new plan in a filing with the Public Utilities Commission of Ohio. Like the rate stabilization plan modified by the commission Sept. 29, the new plan balances the need to provide rate certainty for customers and revenue certainty for the company while encouraging growth of a competitive electric market, the company said.

CG&E, which has about 640,000 electric customers in Southwest Ohio, hasn't had a base electric rate increase since 1992.

But Ohio Consumers' Counsel Janine Midgen-Ostrander said the new proposal is worse for consumers than the modified plan that the commission approved. Her office represents consumers before the commission.

She said her office hasn't calculated the cost of the new proposal but thinks that it would be more than 20 percent over three years.

The consumers' counsel also has asked the commission to reconsider its Sept. 29 ruling, arguing that it violates Ohio's electric deregulation law and will mean higher rates for consumers.

"All of the underlying costs of generating electricity, like coal and natural gas, have increased dramatically," CG&E president Greg Ficke said.

The commission said CG&E would have to justify any increase in residential rates before 2008.

In its request for a rehearing, which the commission has 30 days to decide, CG&E offers three options:

• Accept the original rate stabilization plan.

"We believe that the stipulation that we originally filed was fair," Ficke said.

• Adopt more volatile market-based rates for commercial and industrial customers next year and residential customers in 2006.

• Adopt the new proposal offered by CG&E, which it says protects customers from market-rate volatility.

Ficke said the new proposal, developed in the last month in conversations with the commission's staff, has two key components.

First, CG&E would be permitted to increase the generation portion of rates - typically 60 percent of a total bill - by 4 percent next year for nonresidential customers and 6 percent for residential customers in 2006 to recover the cost of environmental compliance, security and taxes.

In 2007 and 2008, the company would have to apply for any increase.

The company also is proposing that most of these charges would be avoided for the first 50 percent of non-residential customers who switch to alternative suppliers and the first 25 percent of residential customers who switch suppliers.

"We think that will be very attractive (for alternative suppliers) to compete against," Ficke said.

Second, in exchange for CG&E's four-year commitment to use its lowest-cost generation to provide electricity in Southwest Ohio, the utility would seek to recover on a dollar-for-dollar basis the cost of providing electricity.

This so-called infrastructure maintenance fund would operate like a gas-cost recovery charge, which the utility uses to pass through the cost of natural gas it provides to consumers.

E-mail mboyer@enquirer.com