DP&L CEO: Power will get more expensive

Regulations, diverse fuel sources, come with costs, CEO says in interview

Electricity will almost certainly get more expensive, driven by a host of factors, including government regulations and consumer expectations for reliability, Tom Raga, president and chief executive of Dayton Power & Light, said Thursday in an interview.

DP&L today has two proposed rate increases before the Public Utilities Commission of Ohio (PUCO), one for base distribution and another proposed as an electric “security” plan meant to help DP&L deal with vagaries in the market.

“We hired an independent firm to project prices into the future,” Raga said in an interview at Cox Media Group Ohio offices. “And we see electricity prices increasing in the future.”

President Obama’s administration last August proposed a “clean power plan” to move states away from reliance on coal-fired power generation, which is more polluting than natural gas electricity generation. Natural gas releases about half the carbon emissions that coal does when burning.

On Feb. 9, however, the U.S. Supreme Court stayed implementation of the plan as it undergoes judicial review.

DP&L’s proposed security charge, first announced Monday, would increase the bill of an average DP&L residential customer, using using 1,000 kilowatt hours per month, by $1.21. If approved by the PUCO, that increase would start next year.

Power utilities are increasingly expected to use an array of fuel sources — including coal, natural gas and alternative sources, like wind and solar. But there’s a price attached to that “diversity,” Raga said.

“There’s a small charge to keep reliability, keep the fuel diversity, since prices won’t be as volatile, it keeps price stability in there,” Raga said.

If the new security charge is approved, possible benefits could result, the company says. If more revenue than expected is made, then that money will be “returned” to customers in the form of lower charges, Raga said.

“The bill would go down,” he said. “And we’re proposing, DP&L is proposing … complete PUCO oversight.”

Another hike was proposed late last year for a higher base distribution rate that would raise the total monthly bill for the average residential customer using 1,000 kilowatt-hours by $4.07.

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