Mayor proposes Toledo electric utility

3/8/2006

Toledo Mayor Carty Finkbeiner yesterday proposed the city establish its own electric utility to compete with Toledo Edison to offer cheaper power.

In his previous tenure, Mr. Finkbeiner opposed a plan proposed in 1996 by then-Councilman Pete Gerken to create a city-owned utility. But yesterday, he said he's ready to set up a municipal system to combat high electric rates that stifle economic development.

The mayor joined Mr. Gerken, now a Lucas County commissioner, along with seven of the 12 council members, to unveil the proposed ordinance yesterday.

"Toledo consumers and businesses continue to pay some of the highest electric prices in the nation," Mr. Finkbeiner said. "Even worse, Toledo Edison has made it clear that Toledoans will continue to see high prices long into the future."

He said there was a hope in the 1990s that deregulation of the state's electricity generators would lower rates, but it didn't happen.

Councilman George Sarantou said a promised electricity rate rollback is not going to happen. He said Toledo has average rates of 11.4 cents per kilowatt-hour, compared with 8.3 cents for the state and 6.7 cents for Bowling Green.

"We are intent on doing more fact-finding and seeing what we can do with a municipal utility, at least in the downtown area," Mr. Sarantou said.

Councilman Frank Szollosi said he would support a city-owned utility - but only if it used renewable, sustainable sources, not coal, oil, or natural gas.

A spokesman for FirstEnergy Corp., the parent company of Toledo Edison, questioned how Toledo could generate electricity cheaper than FirstEnergy, especially if it plans to burn natural gas. The county has begun generating electricity in the SeaGate Centre with natural gas-fired turbines.

"It's not competitive with our coal and nuclear units. It's one thing to propose [a municipal utility]. There are a lot of costs involved," Ralph DiNicola, a FirstEnergy spokesman, said.

He said FirstEnergy never promised lower rates through deregulation, and added that the solution lies in developing new power plants. He said Toledo's rates are below national averages, and are lower, per kilowatt-hour, than in 1996.

The city-owned utility could begin by supplying power to the Toledo Municipal Court and the city Safety Building. Mr. Gerken said the service could be expanded to include other city buildings, Government Center, the planned new arena, and the Marina District. He said it might be a way to lower the costs of operating One SeaGate, soon to be vacated by Owens-Illinois Inc.

Council President Rob Ludeman said he would support looking at establishing a utility.

"I've been opposed to it in the past. But if high utility rates are hurting our citizens and keeping economic development from taking place, we need to look at alternatives," he said.

The cost to taxpayers of such a system was not spelled out.

The county commissioners are considering building a plant at the former Child Study Institute on Michigan Street to house the heating and cooling system for six county-owned buildings.

Mr. Gerken introduced a plan in 1996 to set up a municipal electric company, but it was not successful.

The plan drew a threat from Toledo Edison to cancel a planned $6.5 million contribution from the utility to Toledo known as the Toledo Edison compact, paid in return for Toledo not objecting to Toledo Edison's merger with FirstEnergy in 1997.

City officials have said the city received the money, as well as two pieces of real estate - the former steam plant downtown and the former Acme Power Plant in East Toledo.

Mr. Finkbeiner said the proposal emerged from the utility rate committee he formed shortly after taking office in January.

Contact Tom Troy at:

tomtroy@theblade.com

or 419-724-6058.