Rate Case Roundup: Ohio

In a case involving an electric utility’s standard service offer rates rather than base rates per se, the Ohio Public Utilities Commission found that a stipulation tendered by the parties met the commission’s criteria for approval.

The proposed settlement delineates a new electric security plan (ESP) for the utility, Dayton Power & Light Company, which plan will be in effect for six years, through October 31, 2023. The commission related that since the advent of industry restructuring in Ohio, jurisdictional electric utilities operate under an ESP construct with regard to pricing the generation component of standard service offer (SSO) rates. It explained that the SSO program is available to those customers who elect to remain with their incumbent utility for their electricity supply rather than choose an alternative energy provider.

In negotiating the latest ESP for Dayton Power, the settling parties elected to retain the utility’s current protocol for procuring supply for its SSO customers, which entails a competitive bidding process. The stipulation also reflects consensus that the utility should continue to recover (or credit) via its nonbypassable reconciliation rider the net proceeds (or loss) from selling power from its share of the Ohio Valley Electric Corporation into the regional marketplace.

Two other riders were discussed in the settlement as well. One, known as the retail stability charge, was eliminated in the agreement. Cessation of that surcharge will save ratepayers some $73 million a year. However, customers will still see their bills rise overall, as termination of the retail stability charge was accompanied by implementation of a new adder known as the distribution modernization rider (DMR). Dayton Power had proposed the DMR as a means for financing what it viewed as crucial improvements to its grid system. As initially proffered, the DMR would have allowed the company to collect from customers $145 million per year for six years for grid modernization projects.

As ultimately adopted, however, the DMR was limited to $105 million a year for three years. In conjunction with the DMR, the commission ordered the utility to file a comprehensive grid modernization plan by August 1, 2018. Re Dayton Power & Light Co., Case Nos. 16- 395-EL-SSO et al., Oct. 20, 2017 (Ohio P.U.C.).