Manufacturers’ group wary of DP&L charges

An association representing Ohio manufacturers is concerned about new charges Dayton Power & Light wants state regulators to approve, calling the proposed cost “staggering.”
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An association representing Ohio manufacturers is concerned about new charges Dayton Power & Light wants state regulators to approve, calling the proposed cost “staggering.”

Consumers office also files complaint against new ‘rider’

An association representing Ohio manufacturers is concerned about new charges Dayton Power & Light wants state regulators to approve, calling the proposed cost “staggering.”

”It equates to a lot of new costs with no benefits to manufacturers,” said Ryan Augsburger, vice president and managing director of public policy services for the Ohio Manufacturers Association.

DP&L withdrew a proposed “reliable electricity” rider — or a new charge on customers’ bills — in September, four days before a public Public Utilities Commission of Ohio hearing at Dayton’s city hall.

Now, DP&L is pursuing other proposed riders or charges — a "distribution investment" rider, a "clean energy" rider and a "distribution and modernization" rider.

The “distribution and modernization rider” would be non-by-passable, Augsburger said, meaning customers in DP&L service territory could not avoid paying it. Depending on whether and how PUCO approves such a rider, it could bring in $145 million per year to DP&L for seven years, according to the association.

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“Regardless of whose power they might be buying in a deregulated market, they have to realize this is not something they can shop around,” he said.

DP&L’s DMR rider would cost small manufacturing companies — those with about $100,000 a year in electricity costs — more than $72,000 total over seven years, according to estimates by the association.

Medium-sized manufacturers would pay an extra $542,527 total over seven years while large manufacturers would pay more than $7.2 million total over seven years, according to the association.

DP&L rates analyst Robert Adams said in a recent application to state regulators a “typical residential customer in 2017” using 1,000 kilowatts per month can expect their bills to go down 87 cents per month, or a 0.76 percent decrease, under the new rate. No estimate is given beyond 2017.

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Last month, in an application to the PUCO, DP&L cited “significant threats” to its financial integrity as a justification for the new proposed charges.

DP&L said at the time that the company needs the charge to deal with what it called weakening credit ratings, “anemic load growth” and “historically low market prices.”

Messages seeking comment were sent to DP&L communication staff Monday.

Also, the Ohio Consumers’ Counsel’s Office — which acts as the lawyer for Ohio’s residential consumers — is trying to head off any attempt by DP&L to collect what it argues would be unduly high bills.

Dan Doron, spokesman for Ohio Consumers’ Counsel’s office, said the office is on guard against any attempt by DP&L to get consumers to “subsidize” the transfer of power plants to an affiliate, AES Ohio Generation LLC. DP&L is owned by Arlington, Va.-based AES Corp.

RELATED: DP&L sells electric division

Doron said federal officials last week took the “positive step” of requiring DP&L to show how its Ohio consumers would be protected against subsidizing the transfer of its plants.

In late 2013, DP&L said it was working toward the sale of power-generating assets to another company by May 2017. In August, DP&L filed at the Federal Energy Regulatory Commission for approval to turn its mostly coal-fired power plants over to AES Ohio Generation.

“The federal case is part of our larger effort — at the PUCO, the Supreme Court and the legislature — to protect Ohioans from proposals by DP&L and other electric utilities to charge above the market price of electricity,” Doron said.

The consumers’ office told the Federal Energy Regulatory Commission in a legal filing last month that it is concerned DP&L could seek a deal similar to one sought by Akron power provider FirstEnergy — a “credit support rider” that would have allowed FirstEnergy to collect up to $1.126 billion for eight years.

RELATED: DP&L CEO: Power will get more expensive

In late October, the PUCO rejected the larger rider sought by FirstEnergy, instead letting the company collect $132.5 million annually over three years — plus extra money to help pay for taxes — with the chance of a two-year extension.

FirstEnergy at the time called the PUCO decision “disappointing.”

The PUCO estimated that the impact on Akron-area homes using an average of 750 kilowatt-hours of electricity monthly would bills rising by about $3 a month.

DP&L has 515,000 customers in 24 Western Ohio counties.

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