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New DP&L plan raises rates, state agency says

DP&L says other parts of plan would result in decrease for customers.

With Dayton Power & Light arguing that its “financial integrity” is at stake, a state regulatory agency has approved new charges and a new “electric security plan” for DP&L customers.

The plan means higher electric bills for some DP&L customers, but a decrease for others, according to the utility.

A state consumer group said the plan’s new charges — or “rider” — for DP&L would be harmful to residential customers, with the “average residential ratepayer” paying $9 a month, or $107 a year, according to its filing outlining the decision on the case.

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The Public Utilities Commission of Ohio said in a release its approval means that DP&L will end the collection of its annual $73 million retail stability charge.“ Instead, a residential customer using 750 kilowatt hours per month will see a monthly bill increase of $2.92 during the term of the” new charge, the PUCO said.

A DP&L spokeswoman concurred that the PUCO’s estimate and disagreed with the Ohio Consumers’ Counsel in its $9 a month estimate.

“The PUCO … correctly characterizes the approval of the three-year distribution modernization rider (DMR) … represents a monthly increase of approximately $2.92 for a typical residential customer in the DP&L service territory, using 750 kWh on DP&L’s standard service offer,” DP&L spokeswoman Mary Ann Kabel said.

“However, other components of the overall ESP rate plan implemented at different times during this year provide the benefit of offsetting this amount, resulting in a monthly decrease of $1.76 from bills at the beginning of the year,” Kabel added.

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A kilowatt hour is roughly enough electricity to watch TV for 10 hours or cook breakfast for a family of four, according to Duke Energy.

“Today’s PUCO approval of DP&L’s so-called ‘electric security plan’ allows more subsidies for the utility’s power plants, payments to special interests, and various other increased charges that Dayton-area consumers will pay,” the Ohio Consumer Counsel said in response to the PUCO’s decision.

DP&L serves 515,000 customers across 24 counties, including Champaign and Western Clark County.

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The electric security plan, which governs how DP&L can do business until 2023, allows DP&L to make a new charge to ratepayers, called a “distribution modernization rider.” The rider is designed to let DP&L collect about $105 million in revenue each year, with the option of stretching the rider another two years, with PUCO approval.

Interested parties to the case, like Kroger, Honda, Walmart and the Ohio Consumers’ Counsel, however, argued that customers shouldn’t have to pay new charges “to solve the company’s self-inflicted financial predicament,” the PUCO said.

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And Walmart argued that even with the new cash infusion from the new rider, DP&L’s credit rating “would still not be investment grade.”

In June 2016, S&P Global Ratings ruled that an Ohio Supreme Court ruling that month “increased the likelihood of a weaker financial profile, reflecting weaker financial measures for DPL and DP&L that could result in a near-term ratings downgrade.”

That month, the Ohio Supreme Court reversed a PUCO decision that let DP&L charge customers extra in an “electric security plan service stability rider.”

In July 2016, Fitch Ratings revised its outlook for DP&L from “stable” to “negative,” the utility has said.

In its Friday filing, the PUCO said that the evidence shows that the new rider, along with a “reconciliation rider,” would result in a “marked improvement” for DP&L’s financial health.

The PUCO ruled that Ohio law allows the new charges, and that DP&L should file “final tariffs,” with the new electric security plan starting Nov. 1. The state agency also ordered that DP&L notify customers of the changes via a bill message or a bill insert within 30 days of Nov. 1.

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