PUCO votes for new AES Ohio electric security plan; rates expected to rise

Members of the Public Utilities Commission of Ohio approved a new “electric security plan” or “ESP” for AES Ohio Wednesday, setting Dayton-area residential electric rates for the next three years.

The vote by the five-member commission was unanimous. PUCO staff expect to have a precise calculation on how the plan will impact local electric rates later this afternoon. This story may be updated.

But rates are expected to rise over the course of the plan.

Earlier this year, Sharon Schroder, regulatory affairs director for AES Ohio, testified that implementing the company’s ESP settlement would initially result in a $1.49 monthly decrease — but coupled with implementing new distribution rates of approximately $8, the result would be a net increase of $6 to $6.50 per month for a resident using 1,000 kilowatt-hours of electricity.

Schroder also testified before the PUCO this year that the utility hasn’t been able to afford needed investments in distribution infrastructure, and has not been able to manage vegetation on its distribution lines consistent with company plans.

“As the commission (the PUCO) has recognized, AES Ohio has been operating under financial stress for years,” Schroder testified.

An ESP is an operating plan that sets prices for the generation of electricity, and it may cover investments in distribution and updates to the electric grid.

A spokeswoman for AES Ohio, the former Dayton Power & Light, said the company will review the ESP settlement order posted to the PUCO docket before issuing a press release, which may come after the close of business Wednesday afternoon.

The electric company filed a settlement of its ESP in April, reached after negotiating with PUCO staff and interested parties, such as the city of Dayton and big power users like Kroger, the University of Dayton and the Ohio Manufacturing Association, among others.

The Ohio Consumers’ Counsel Office earlier recommended that PUCO commissioners reject the settlement and minimize any rate increase.

“This is a bad time for a rate increase, as inflation and high energy prices are already putting a strain on household budgets,” the counsel’s office told the Dayton Daily News before the PUCO’s vote Wednesday.

Electric rates are complicated. There are generally two parts to residential electric bills, fees for distribution (or delivery) and supply. (There can also be fixed fees and other charges.)

If you live in a community that is part of an aggregation pact seeking lower electric rates, you likely still saw rising energy prices last year. Aggregation programs typically do not lower distribution rates, only supply charges. Distribution charges apply to all customers.

To take one local aggregation program as an example, the city of Dayton bought electricity supply at $0.0965 per kilowatt-hour (kWh) in June at a time when AES Ohio set its standard service offer starting at $0.108.

Energy generation rates are set by competitive auctions.

AES Ohio first applied to the PUCO for the new ESP last September.