FirstEnergy rate-hike bid faces city, county opposition

6/8/2005

FirstEnergy Corp.'s application to bump up electric rates will face opposition from Lucas County and the city of Toledo.

Toledo Councilman Ellen Grachek said she will hold a hearing of council's utilities committee June 23 to examine the proposed increases, which will cost the average homeowner about $2 a month.

Ms. Grachek, who was joined by committee Vice Chairman George Sarantou, questioned how First Energy could justify a rate increase when the company earned nearly $900 million in profits last year.

The Akron-based company reported Feb. 15 that its profits doubled last year, from $422.8 million in 2003 to $878 million in 2004.

Ms. Grachek and Mr. Sarantou recently have taken on Columbia Gas of Ohio Co. over its rates.

FirstEnergy has asked the Public Utilities Commission of Ohio to allow it to charge about a quarter of a cent more on its hourly electric costs, beginning Jan. 1.

Ellen Raines, a spokesman for the energy company, said FirstEnergy's rate stabilization plan allows it to seek recovery of increased costs. She said the price of coal has increased, and FirstEnergy wants its rates to reflect the company's costs.

"The bottom line of our filing is the cost to purchase coal has gone up significantly in the last few years," Ms. Raines said.

She said Toledo customers are paying less per kilowatt-hour now than they were before FirstEnergy's acquisition of Toledo Edison in 1997. FirstEnergy intends to spend $1 billion this year on system enhancement and maintenance, Ms. Raines said.

The increase could raise homeowners' monthly bills by $2.04 based on average usage of 750 kilowatt-hours.

The request, filed May 27, will be reviewed by the PUCO, which likely will hold hearings.

Ms. Grachek said "the $300 million that First Energy is asking for over the next three years comes directly from the pockets of seniors on a fixed income, working families, and taxpayers."

Mr. Sarantou said the rate increases will hurt Toledo's struggling economy.

He said businesses in Toledo already have the highest utility costs of Ohio's eight major cities.

According to a PUCO survey, the average commercial customer in Toledo, as of May 15, was paying $34,789 for electricity, compared with the average for the state's eight major cities of $26,690.

The same survey showed that the average Toledo industrial customer paid $773,486 as of May 15, well over the state's average of $476,086.

The average residential electric bill as of May 15 was $83.15 in Toledo, sixth highest of 16 Ohio cities. Residents of Akron, Youngstown, Lorain, Marion, and Mansfield had average monthly rates of $85.78. The average for the 16 cities was $71.81.

FirstEnergy had agreed to freeze its rates from 2006 to 2008, in exchange for being able to collect $3 billion from customers that is equivalent to a fee it has collected to repay some debts.

The utility also has had its rates frozen for the last five years in return for collecting a similar fee.

The Lucas County commissioners already voted to oppose the rate increase. Lawyers representing the city and the county will file petitions to intervene in the rate case.

Contact Tom Troy at:

tomtroy@theblade.com

or 419-724-6058.