After two weeks of negotiating with FirstEnergy Corp., Mayor Jack Ford yesterday cast a tie-breaking City Council vote endorsing the company's new "rate certainty plan."
The plan freezes electric rates for the next three years in exchange for marginally increased fees for the following quarter-century. FirstEnergy officials said it would save Toledoans about $20 million through October, 2008 - but the money will have to be repaid at a 5 percent annual interest fee over the following 25 years, when rates are expected to drop.
With Toledo's endorsement, FirstEnergy officials will go before the Public Utilities Commission of Ohio, which approves rate changes, Nov. 29 to propose the plan.
The mayor used the two-week period to check into negotiations between the Ohio Consumers' Counsel and FirstEnergy.
The interval became available to him after he withheld his vote during an Oct. 18 council session, when the decision to pass the ordinance was deadlocked at 6-6.
"You keep talking until you get what is fair and best for the consumers. I know deeply in my heart we've done just that," Mayor Ford said yesterday.
The negotiated stipulations include:w●Splitting a large portion of the program's costs among all FirstEnergy companies. Previously, costs would be split solely between Toledo Edison and Ohio Edison customers.
●Allowing FirstEnergy customers renting apartments and using electricity for heat to continue to receive a discounted "all electric rate" through 2008, even if they move. Previously, the special rate would have been lost once such customers move.
●Provide an additional $1 million for FirstEnergy-funded "energy management" programs, such as retrofitting lights.
●Make clear that the Northwest Ohio Aggregation Coalition, of which the city is a part, may debate future rate cases.
In response to the negotiations, Ellen Grachek, chairman of council's environment, utilities, and public service committee, and Lucas County Commissioner Pete Gerken both thanked the mayor.
Ms. Grachek noted that the Consumers' Counsel and the aggregation coalition now both approve of the plan.
Afterward, however, Ms. Grachek said she still had mixed feelings. "Jack listened to me but the deal's still not great. I'm glad I didn't have to vote on it [again]," she said.
Councilman George Sarantou, an outspoken opponent of the original plan, said credit should be given to council for the added stipulations.
"This deal happened because six courageous council members dug their heels in. The mayor was all set to sign it before," Mr. Sarantou said. "I'm glad the mayor saw the light that I have seen for some time."
Chuck Krueger, vice president of Toledo Edison, said several of the new stipulations were simply clarifications, particularly a claim by the mayor that he had reduced the proposed interest rate for the plan from 8 percent to 5 percent.
Mr. Krueger said the plan was always set at 5 percent, and that there was simply confusion on that matter.
Tom Crothers, the mayor's chief of staff, said some initial correspondences with FirstEnergy listed the interest rate at 8 percent.
The possibility of the mayor's deciding vote was brought up during a campaign slug-fest Monday when Toledo mayoral candidate Carty Finkbeiner charged Mr. Ford with having a conflict of interest because he had taken campaign contributions - $8,100 since 2004 - from FirstEnergy.
Mr. Ford countered with a claim that Mr. Finkbeiner himself asked FirstEnergy for $14,000 in campaign money, but was rejected - a claim Mr. Finkbeiner's campaign denied.