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Published: 5/8/2009

24 communities accept discounted electric rates

BY JON CHAVEZ
BLADE BUSINESS WRITER

The discounts stem from new agreements the three northwest Ohio communities and 21 others in northern Ohio signed with a subsidiary of FirstEnergy Corp., which owns Toledo Edison Co.

The lower price will apply to anyone in those communities, replacing prior discounts in some areas that expired last year.

Marc Thompson, Ottawa Hills village manager, said the village calculates that its 1,500 residential and 75 commercial customers will save about $156 through 2012.

Dave Williams, law director for Defiance, said the city has 3,500 residential and 800 commercial customers, and it estimates customer savings will be between $80 and $120 per household over the contract.

Toledo and other suburbs in a bulk-buying group are not negotiating for reduced prices with FirstEnergy, instead awaiting the outcome of competitive bidding by power suppliers next week.

Those bids will be used to establish FirstEnergy rates for the next 3 1/2 years, a city of Toledo spokesman said, and after that, the bulk-buying group will begin looking for a better rate.

FirstEnergy Solutions is negotiating for discounts with 10 northern Ohio communities, but it declined to identify them.

The FirstEnergy affiliate said yesterday that it had reached agreements with 24 communities, covering 195,000 homeowners and renters and 21,000 businesses. Other communities in the group include Cleveland suburbs of Aurora, Euclid, Parma, and Ravenna.

The agreement provided for the municipality to choose either a plan that would cut FirstEnergy's regular price by 10 percent this year, 6 percent next year, 5 percent in 2011, and 4 percent in 2012, or a flat 6 percent discount for each of the four years.

The new pricing begins June 1. The exact kilowatt-per-hour rate will not be known until the auction.

Ottawa Hills and Defiance chose the flat-rate plan, and each is served by Toledo Edison. Sandusky officials could not be reached for comment; the community is served by FirstEnergy company Ohio Edison.

Toledo is part of the Northwest Ohio Aggregation Coalition, a group of 75,000 residential and commercial consumers that includes Maumee, Northwood, Oregon, Sylvania, Perrysburg Township, Holland, Lake Township, and Lucas County.

Leslie Kovacik, who represents Toledo in the group, said the coalition decided to wait until after FirstEnergy's price is set by the power auction, and then solicit bids for any utility that may want to beat that price.

FirstEnergy Solutions could be one of the bidders, she added.

"We don't know if there will be any other bidders, but to do this fairly, we felt we had to wait," Ms. Kovacik said.

The discount offered to the 24 communities applies to the utility's charge for generating the electricity and doesn't apply to its transmission and other fees included in monthly bills.

The amount of savings will depend on a customer's electric usage and what the new base rate will be after next week's auction.

FirstEnergy Solutions, the subsidiary that sells the utility's power, set Tuesday as the deadline for local governments to accept either of the firm's two electricity-rate discounts. It said it could not keep the offer open later because Wednesday is when the competitive bids are due to serve customers in FirstEnergy's territory.

It sent out solicitations to various bulk-buying groups last month.

Residents can decline the discounts.

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.



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