PUCO REPORT, DP&L DEAL PROVE ELECTRICITY DEREGULATION IS A FAILURE; CITIZEN POWER URGES GENERAL ASSEMBLY TO RE-REGULATE BEFORE AN ENERGY CRISIS HITS OHIO

CLEVELAND, Ohio, June 2/PRNewswire—The latest “Report of Market Activity” from the Public Utilities Commission of Ohio makes it very clear that Ohio’s “Electric Choice” program is a flop, according to David Hughes, executive director of Citizen Power, a regional utility watchdog organization. The Report contains no new information and continues to rely on inflated numbers. “PUCO keeps glazing over the real story which is that there is virtually no competition in the electricity generation market,” said Hughes.

“The recent deal in the Dayton Power & Light case proves that fact. Parties are recommending that the DP&L Market Development Period be extended for two more years because there is no competition. The fear is that if price controls come off at the end of this year, DP&L customers will experience ‘rate shock’. The fear is warranted because there is nothing to stop unregulated monopolies like DP&L and Ohio’s other utility companies from charging whatever they want once the MDP ends,” Hughes said.

PUCO Chairman Alan Schriber and Consumers’ Counsel Robert Tongren continue to blame things like the Enron collapse, the California energy crisis, and the slow pace of developing wholesale competition as the reasons for the lack of retail competition in Ohio.

“These are red herrings. Ohioans have PUCO and OCC to thank for the failure of deregulation,” Hughes said. “It was their decisions that prevented competition from developing here. Schriber and Tongren let utilities keep control of their transmission lines and refused to prevent utility mergers that increased market power. And the Ohio Supreme court refused to correct the situation,” Hughes continued.

While there are virtually no customers switching suppliers in southern Ohio, PUCO’s Report shows fairly high numbers of customers choosing ‘alternative suppliers’ in northern Ohio. “The numbers look good because PUCO does not tell us who those ‘alternative suppliers’ are,” said Hughes. “If you look closely, you will see that the vast majority of customers have not switched to a real alternative because PUCO counts switches to utility affiliates as a competitive switch. That’s one way to inflate the numbers and make it look like there is competition,” Hughes said.

“There are structural problems with deregulating electricity generation and simply extending the Market Development Period is not going to make those problems go away. PUCO, OCC and the Ohio Supreme Court have failed to protect ratepayers. For nearly three years Schriber and Tongren have been telling us ‘it takes time for the market to develop.’ What is going to make that happen? The General Assembly should reinstitute regulation of electric generation prices and supply before the MDP ends,” Hughes concluded.