PUCO order cuts DP&L revenue by $70 million

Dayton Power & Light told the state it will end its “distribution modernization rider” — a monthly charge — in response to a recent Ohio Supreme Court ruling, a state regulatory organization said Wednesday.

The change should result in bills going down by about $9.40 for residential consumers using 1,000 kilowatt hours of electricity monthly. A medium-sized window air conditioner using 1,000 watts an hour is equivalent to one kilowatt hour or kWh. A 100-watt light bulb used for 10 hours equals one kWh.

“The net effect of reverting to (the earlier electric security plan) rates results in the reduction of annual revenues to DP&L by approximately $70 million,” the Public Utilities Commission of Ohio (PUCO) said Wednesday.

It’s not clear how the company will deal with a revenue hit of that size.

In response, DP&L in late November sought permission from the PUCO to raise rates. The utility applied to implement an “infrastructure investment rider” and a “rate stabilization charge.” Those charges were consistent with earlier electric security plans that the PUCO has approved, DP&L said in a Nov. 25 filing with the PUCO.

The PUCO approved both riders, said Matt Schilling, a PUCO spokesman.

“Today’s PUCO decision is a first step for DP&L to begin to financially recover from the PUCO’s November 21st decision disallowing DP&L’s distribution modernization rider in customer rates,” Vince Parisi, DP&L president and chief executive, said in a release. “We will continue to work with the PUCO on a long-term solution to enable DP&L to provide customers the safe, reliable and affordable service they expect and to modernize the grid for the future.”

The net result remains a $70 million hit to DP&L’s revenue. The distribution modernization rider by itself collected about $105 million a year, Schilling said.

Some big DP&L customers had opposed the notion of DP&L reverting to earlier charges.

“The PUCO should reject DP&L’s new scheme to continue collecting unlawful subsidies from customers by reinstating select old rates from its first, second, and third electric security plans,” Kroger, the Ohio Manufacturers Association Energy Group and the Office of the Ohio Consumers’ Counsel wrote in a Dec. 4 filing to the PUCO.

Last month, the PUCO directed DP&L to end the distribution modernization rider because of a recent Supreme Court of Ohio ruling on a similar charge for FirstEnergy, another Ohio utility.

Schilling told the Dayton Daily News last month that DP&L was not ordered to give customers refunds. Instead, the utility was told to file revised rates.

Bruce Weston, the consumers’ counsel, is pushing the PUCO to give customers refunds.

“Dayton-area utility consumers would not be mistaken if they think the system is rigged against them.” Weston said in an emailed statement this week. “Even when utility consumers win at the Supreme Court or the PUCO, they can lose. There will be no refunds to the 2.4 million consumers of DP&L and FirstEnergy for their past payments of hundreds of millions of dollars for a charge that was found to be unlawful.”