Ohio electricity users will be allowed to shop next year for power much the way they can shop for long-distance service and natural gas now that the electric industry has been deregulated.

Saturday, March 04, 2000

Ohio electricity users will be allowed to shop next year for power much the way they can shop for long-distance service and natural gas now that the electric industry has been deregulated.

Competition will start in 2001, when a five-year marketing transition period for electric utilities begins.

"On Jan. 1, Ohio residents can choose who will supply their kilowatt hours," said Tim Moser, American Electric Power’s state president for Kentucky.

Moser presented AEP’s views on deregulation at Thursday’s Ironton Area Kiwanis Club meeting.

State legislators approved bills last year that lifted regulations on the industry, but only on its sale of electric power.

Transmission and distribution will remain regulated monopolies using existing power lines. The utility companies must separate those divisions from their generation divisions by midway through the transition period.

Similar deregulation will be considered by Kentucky legislators, probably in 2002, and West Virginia legislators, probably this year, Moser said.

In Ohio next year, the only choice a consumer will have is who they buy kilowatt hours from, he said.

"The electricity will still come from the same service drop, wires and transformers," he said.

Yet, consumers can buy the electricity itself from Dayton Power and Light, Cinergy or power generators from states away.

Industrial electric customers can shop around in a wider area for their power generation needs, which could increase their buying power, Moser said.

Power can now be considered a commodity now, so when more is available it turns it into a competitive market and the consumer comes out ahead, he said.

"It’s the power generation side that will be the competitive element and that’s where people are going to be cut-throating each other or trying to," he said.

"We’re making sure we do everything we can to make sure our price is competitive," Moser said.

Although AEP and other electric companies were not pleased when the deregulation debate began, they sought compromises and decided to embrace consumer choice, he said.

"It’s the same thing the natural gas industry underwent several years ago."

Electric customers will see bill changes in wake of the deregulation.

Bills will now have line items showing individual power generation, distribution, transmission and other costs, as well as taxes applied by state and local taxing districts, Moser said.

This spring, AEP and other utility companies will hold public hearings in an effort to fulfill a required transition plan by October, he said.

The state is setting standards that electric utilities must meet because of deregulation, including limits on power outages and anti-slamming rules, he said.

The state also has promised to make up potential tax shortfalls to local taxing districts and consumers can expect a 5 percent savings on generation immediately, Moser said.

Under deregulation, cities and villages will be allowed to form groups called ”aggregations” to buy electricity at bulk rates for their residents.