CITIZEN POWER

Public Policy Research Education and Advocacy

F O R I M M E D I A T E R E L E A S E Contact: David Hughes

November 5, 2003 412/421-6072

TONGREN REPLACEMENT ONLY FIXES PART OF THE PROBLEM; CITIZEN POWER SAYS THE BUCK STOPS AT THE PUCO AND CALLS ON THE GENERAL ASSEMBLY TO REIGN IN PUCO

MADISON, Ohio, November 5/PR Newswire—Citizen Power welcomes the resignation of Consumers’ Counsel Robert Tongren. However, replacing Tongren will only fix a small part of a generalized imbalance in Ohio government dealings on utility issues, according to executive director David Hughes.

Citizen Power was a party to the FirstEnergy restructuring proceeding before the Public Utilities Commission of Ohio and opposed the settlement in that case that PUCO approved in July 2000. “We were aware of the LaCapra Study and were excited about the impact it would have when it was made public,” said Hughes. “When Tongren signed off on the FirstEnergy settlement we knew he sold out because he agreed to give FirstEnergy billions in transition charges that his own consultant said it was not entitled to collect. Tongren should pay the price for this, but the real culprit is PUCO.”

Only 15 of the 51 parties in the FirstEnergy restructuring case signed the settlement. Citizen Power urged PUCO not to approve the settlement because it contained provisions that were clearly harmful to ratepayers. “Freezing our rates 40% above where they should be was no bargain,” said Hughes. Citizen Power appealed PUCO’s decision to approve the anticompetitive provisions to the Ohio Supreme Court but the Court refused to hear the case.

“The PUCO approved an anticompetitive settlement and now we see the result of this bad deal. There is no competition in Ohio and now utilities are essentially blackmailing PUCO into approving an extension of stranded cost collection, or risk price gouging after the Market Development Period ends in 2005,” Hughes continued.

“PUCO is supposed to protect both the utilities and the ratepayers, but its track record is clearly pro utilities. A new Consumers’ Counsel will not have the necessary leverage to extract concessions from utilities if the PUCO remains so pro utilities,” said Hughes.

“Tongren was instrumental in permitting settlements that killed competition, but the buck stops at the PUCO,” Hughes said. “PUCO has refused to implement the spirit of Senate Bill 3 and is making rules that allow utilities to increase market power through unfair advantages. That is why, other than the Northeast Ohio Public Energy Council, consumers have no choices. Once the MDP is over, PUCO will not be able to stop legal price gouging and the destruction of NOPEC.”

Mr. Hughes testified at the Ohio Senate Public Utilities Committee hearing on electricity deregulation last week. He urged Senators to reign in PUCO while there is still time. “If the legislature doesn’t act now, California-like problems are sure to eventually occur here. Tongren’s resignation will not change that reality,” Hughes concluded.

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