Experts debate electricity rates

The complex topic of restructuring electricity rates in Ohio came to Akron on Friday as a panel of experts debated the subject in front of the Akron Press Club. Full Story
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Level The Playing Field

Avon Lake, OH

#3 Jan 26, 2008
The only reason the governor is opposed to going to market is because he is receiving contributions from large industrial customers or the lobbyists that represent them. If we go to market the playing field will be leveled. Everyone will pay the same price for kWHs -residential or commercial. These large industrial customers won't be able to get electric for 4 cents anymore. Right now residential customers and small commercial customers bear the weight in the state they pay higher prices because of these special deals. It's corruption at its best. That is what a regulated state is. We need to de-regulate and give people a choice. Competion/capatialism is what our county was built on. No more special deals/relief for big business should be allowed. The citizens of this state are tired of paying for big business flourish.
OldManGrump

Akron, OH

#4 Jan 26, 2008
The only debate is the Ohio House & the Utility Lobbyists money vs the Governor, Ohio Senate, and what's good for the people of Ohio. This should be a no brainer. Send your Ohio House rep a note to vote for the senate bill and let's get utility rates right for the people of Ohio.

Deregulation sucks !!!
Use Common Sense

Cleveland, OH

#5 Jan 26, 2008
Why does my wallet run and hide whenever it's mentioned that "experts" are discussing what is a fair price to pay for any of my utilities. HEY maybe our current rates will go down! Go Experts!

Since: Mar 07

Akron, OH

#6 Jan 26, 2008
The fact that an environmental group has a seat on any panel, should tell ever-buddy how much things will cost us in the future.

No-buddy wants to pollute, but these fruitcup organizations have been drivin' up the cost of everythin' since the oil crisis of '73.
Level The Playing Field

Avon Lake, OH

#7 Jan 26, 2008
Old Man Grump WAKE UP!!

Re-regulation is not the best choice for the people of Ohio. Read the comments from the Ohio Consumers Council. Let us look at the utilites regulated price and competitive bids. Let the lowest price WIN!!!
OldManGrump wrote:
The only debate is the Ohio House & the Utility Lobbyists money vs the Governor, Ohio Senate, and what's good for the people of Ohio. This should be a no brainer. Send your Ohio House rep a note to vote for the senate bill and let's get utility rates right for the people of Ohio.
Deregulation sucks !!!
Fix the Cause

Erie, PA

#8 Jan 26, 2008
First Energy is the new Enron. It will do to Ohio what Enron did to California and Texas. It has already spiked prices in PA. The prices will go up no matter what the Ohio House does or the PUCO unless they go back to full blown regulation. The utilities control the MISO's and PJM's which have become financial trading markets for the Wall Street boys to make money with the FTR's (financial transmission rights) and their no generator left behind method; even the lowest price generator will get the highest price paid for power transmitted. These created high prices will eventually be paid for by the consumer. As long as the generators and the MISO's have no real regulation they will spike the prices up.
Level The Playing Field

Avon Lake, OH

#9 Jan 26, 2008
FirstEnergy is the new Enron? You have got to be kidding me! The rates that FirstEnergy charges now are a net loss for their generation. Prices have been frozen in the state since 1992. The cost of Iron, Copper, Steel, and Coal has all increased 80% or more. How can you expect a company to run in the negative when it comes to generation of electricity? You can't compare Ohio to California. Those utility companies owned their own generation. Ohio Edison, Illuminating Company and Toledo Edison don’t' own any generation plants anymore. They have adjusted their fuel costs and universal service riders so if Ohio goes to market the leap won't be extreme. They are the only company in the State/Nation that sold off their generation fleets which is what Senate Bill 3 called for. They are the only company in the state that has fully complied with the law!! So to compare them to Enron is ludicrous! First Energy is one of the largest contributors to taxes in the State. We should be thanking them for keeping our economy above water. Without them we would be worse off.

This is going to turn into a Federal case if Ohio doesn’t fully deregulate. Government can’t tell an un-regulated company (FirstEnergy's Generation Fleet) what to do or charge that is unconstitutional. If it goes to Federal Court the State of Ohio will loose for FirstEnergy has followed the law of Senate Bill 3 to the word.
Fix the Cause wrote:
First Energy is the new Enron. It will do to Ohio what Enron did to California and Texas. It has already spiked prices in PA. The prices will go up no matter what the Ohio House does or the PUCO unless they go back to full blown regulation. The utilities control the MISO's and PJM's which have become financial trading markets for the Wall Street boys to make money with the FTR's (financial transmission rights) and their no generator left behind method; even the lowest price generator will get the highest price paid for power transmitted. These created high prices will eventually be paid for by the consumer. As long as the generators and the MISO's have no real regulation they will spike the prices up.
knowingishalfthe battle

Bay Village, OH

#10 Jan 26, 2008
First Energy is talking accounting schemes, not reality. Ohio rate payers paid for all of their Ohio network. Now they want to shaft us.
knowingishalfthe battle

Bay Village, OH

#11 Jan 26, 2008
Level The Playing Field wrote:
FirstEnergy is the new Enron? You have got to be kidding me! The rates that FirstEnergy charges now are a net loss for their generation. Prices have been frozen in the state since 1992. The cost of Iron, Copper, Steel, and Coal has all increased 80% or more. How can you expect a company to run in the negative when it comes to generation of electricity? You can't compare Ohio to California. Those utility companies owned their own generation. Ohio Edison, Illuminating Company and Toledo Edison don’t' own any generation plants anymore. They have adjusted their fuel costs and universal service riders so if Ohio goes to market the leap won't be extreme. They are the only company in the State/Nation that sold off their generation fleets which is what Senate Bill 3 called for. They are the only company in the state that has fully complied with the law!! So to compare them to Enron is ludicrous! First Energy is one of the largest contributors to taxes in the State. We should be thanking them for keeping our economy above water. Without them we would be worse off.
This is going to turn into a Federal case if Ohio doesn’t fully deregulate. Government can’t tell an un-regulated company (FirstEnergy's Generation Fleet) what to do or charge that is unconstitutional. If it goes to Federal Court the State of Ohio will loose for FirstEnergy has followed the law of Senate Bill 3 to the word.
<quoted text>
What you speak of is all the result of legal and accounting moves to force deregulation on ratepayers. Deregulation would only work if a de facto market existed. Why would the public want a market? Any attempt to have a market would lead to waste. A market would lead to overbuilt and competing generation facilities and networks. Recall telco networks before the AT&T monopoly. The overbuilt and competing generation facilities and networks would have an adverse impact on the environment. Deregulation only poses to benefit First Energy shareholders and senior management to the detriment of Ohio ratepayers. By law, Ohio ratepayers pay for all of a utilities plant and generation costs, plus a very reasonable rate of return. Ohio ratepayers have paid for First Energy's generation and transmission assets pursuant to the law. Where is the justice in allowing First Energy to earn more than its fair share by increasing Ohio ratepayers' rates when Ohio ratepayers have paid for the generation and transmission facilities. The experiments in the other states have failed. Ohio will not fall for the foolish promises that people in other states have.
Solarman

United States

#12 Jan 26, 2008
Level The Playing Field wrote:
The only reason the governor is opposed to going to market is because he is receiving contributions from large industrial customers or the lobbyists that represent them. If we go to market the playing field will be leveled. Everyone will pay the same price for kWHs -residential or commercial. These large industrial customers won't be able to get electric for 4 cents anymore. Right now residential customers and small commercial customers bear the weight in the state they pay higher prices because of these special deals. It's corruption at its best. That is what a regulated state is. We need to de-regulate and give people a choice. Competion/capatialism is what our county was built on. No more special deals/relief for big business should be allowed. The citizens of this state are tired of paying for big business flourish.
BEWARE, utilities can and will move generation facilities to other states where they can enjoy a base rate and sell overproduction for a greater rate to Ohio. If you have less generating capacity than the state needs,there is no real supply demand checks and balances on power pricing. Look at the refineries of petroleum products. Gas prices in this country would be lower if more refineries were competing to sell their product. There has been a fairly flat refining capacity in this country since the 1970's.
Level The Playing Field

Avon Lake, OH

#13 Jan 26, 2008
knowingishalfthebattle wrote:
<quoted text>
What you speak of is all the result of legal and accounting moves to force deregulation on ratepayers. Deregulation would only work if a de facto market existed. Why would the public want a market? Any attempt to have a market would lead to waste. A market would lead to overbuilt and competing generation facilities and networks. Recall telco networks before the AT&T monopoly. The overbuilt and competing generation facilities and networks would have an adverse impact on the environment. Deregulation only poses to benefit First Energy shareholders and senior management to the detriment of Ohio ratepayers. By law, Ohio ratepayers pay for all of a utilities plant and generation costs, plus a very reasonable rate of return. Ohio ratepayers have paid for First Energy's generation and transmission assets pursuant to the law. Where is the justice in allowing First Energy to earn more than its fair share by increasing Ohio ratepayers' rates when Ohio ratepayers have paid for the generation and transmission facilities. The experiments in the other states have failed. Ohio will not fall for the foolish promises that people in other states have.
1) Ohio Rate Payers paid for improvements in the Distribution system and Generation. The generation was Sold for book value…so no one has been shafted reliability has improved 300% in the last 3 years so how are rate payers being shafted? Our dollars as citizens were well spent to improve the system. FirstEnergy will continue to be the distributor so those distribution investments stay in tact and will continue to improve.
2) Force Deregulation? FirstEnergy was opposed to being deregulated when Senate Bill 3 passed in 1999. It was Large Industrial customers that forced deregulation so get your facts straight. Now big business is singing a different tune. Why because they want small residential customers to subsidize their low rates.
3) A market does exist today and is operating today in the state of Ohio. Millions of transactions occur annually.
4) Why would the public want a market? To get the cheapest price per kwh.
5) Paying for assets that are now maximized? As ratepayers we will continue to pay for the infrastructure that stays unchanged. Demand for electricity in the state will continue to grow. We are lucky. in Europe on average they pay 14 cents per kwh. In this country on average we pay 6.5 cents. China is building 1 coal power plant a week to prepare for demand growth. When is the last time we built a power plant in the state of Ohio?
6) The other states failed for many reason and none of which you can compare to Ohio. The utilities owned the generation that is the number one difference. Secondly, our current rates in Ohio are very close to Market price. Go to the MISO website and check for your-self. Because of all the freezes in rates (since 1992) the utilities prices are artificially low. Who can compete with that? No one..that is why the market has failed. Once we deregulate in 2009 we will, over time, be able to buy lower than what the utility can offer. You need to look at the BIG PICTURE the Long Haul. Not short term gratification.

Regulation is a thing of the past!

Knowingishalfthebattle…..You are living in the past. You yourself have become disposable and obsolete.
knowingishalfthe battle

Bay Village, OH

#14 Jan 26, 2008
1)
It's hard not to improve after the black out several years ago. If your company would have been using ratepayer dollars to properly maintain your facilities, the blackout likely wouldn't have happened. Also, there are lies, damn lies, and statistics...
Your usage of the term distributor connotates that electricity is easily distributable over long distances without line loss. You can't package electricity like you can other commodities.

Big business wisely does not unwarranted volatility in energy prices resulting from a sham "market".

3)
I would be interested to how the average person would react to your explanation of a market. The market you speak of is not a market in terms of how the average person would expect a market to be. Your "market" is a scheme built on paper trades without the likely delivery of the "product" in the end.

4)
But at what long term cost? Ohio ratepayers shouldn't have to bear the burden of long term costs to cope with Wall Street's short term profit ambitions.

5)
It's up to the generation companies to build the power plants. I wonder how many power plants sites approved by the PUCO have been improved by those companies? Why haven't the power companies built more generation plants in Ohio? Have something to do with the line loss calculations they would have to figure in when figuring out the feasibility of transmitting electricity long distances to the areas that would pay more? Notice I didn't use the word market.

6)
Here, you are full of it. Have you ever looked at anything related to the California meltdown?

Again there is no market.

There wasn't a market to begin with so how can it fail? I agree utility prices are artificially low, but we probably disagree as to the extent.
You are simultaneously confused or misinformed, and self-righteous - a dangerous combination.
I would rather trust the rate setting to a state agency any day rather than rely on some sham paper market...Again, I agree that current rates are probably below where they should be due to regulatory agreements entered into by power companies and regulatory authorities. But, I wonder what would happen to a "market" if the selling companies were related to the buying companies, or if the traders had no interest in receiving the final product...In the end, there is simply too much at stake economically and environmentally for us to allow some sham market to dictate our electricity prices.
Level The Playing Field

Avon Lake, OH

#16 Jan 26, 2008
knowingishalfthebattle wrote:
1)
It's hard not to improve after the black out several years ago. If your company would have been using ratepayer dollars to properly maintain your facilities, the blackout likely wouldn't have happened. Also, there are lies, damn lies, and statistics...
Your usage of the term distributor connotates that electricity is easily distributable over long distances without line loss. You can't package electricity like you can other commodities.
Big business wisely does not unwarranted volatility in energy prices resulting from a sham "market".
3)
I would be interested to how the average person would react to your explanation of a market. The market you speak of is not a market in terms of how the average person would expect a market to be. Your "market" is a scheme built on paper trades without the likely delivery of the "product" in the end.
4)
But at what long term cost? Ohio ratepayers shouldn't have to bear the burden of long term costs to cope with Wall Street's short term profit ambitions.
5)
It's up to the generation companies to build the power plants. I wonder how many power plants sites approved by the PUCO have been improved by those companies? Why haven't the power companies built more generation plants in Ohio? Have something to do with the line loss calculations they would have to figure in when figuring out the feasibility of transmitting electricity long distances to the areas that would pay more? Notice I didn't use the word market.
6)
Here, you are full of it. Have you ever looked at anything related to the California meltdown?
Again there is no market.
There wasn't a market to begin with so how can it fail? I agree utility prices are artificially low, but we probably disagree as to the extent.
You are simultaneously confused or misinformed, and self-righteous - a dangerous combination.
I would rather trust the rate setting to a state agency any day rather than rely on some sham paper market...Again, I agree that current rates are probably below where they should be due to regulatory agreements entered into by power companies and regulatory authorities. But, I wonder what would happen to a "market" if the selling companies were related to the buying companies, or if the traders had no interest in receiving the final product...In the end, there is simply too much at stake economically and environmentally for us to allow some sham market to dictate our electricity prices.
1) My Company? I'm a rate payer not an employee.

2) The blackout was caused by a software/server crash the federal report was released about a month ago.

3) You are confusing distribution dollars with generation dollars they are not the same you obviously have no understanding of the utility industry!

3) The market exists and is thriving. Ohio is going to Market in January of 2009 weather you like it or not. The law is already in place (Senate Bill 3).

4) You are the one that is simultaneously confused or misinformed, and self-righteous - I agree your characteristics are a dangerous combination.

5) I'll but my life savings you represent big industry or a large commercial entity…trying to subsidize your business by residential customers and small commercial stores. You should be ashamed of yourself you dirty capitalistic pig!
Level The Playing Field

Avon Lake, OH

#17 Jan 27, 2008
knowingishalfthebattle wrote:
1)
It's hard not to improve after the black out several years ago. If your company would have been using ratepayer dollars to properly maintain your facilities, the blackout likely wouldn't have happened. Also, there are lies, damn lies, and statistics...
Your usage of the term distributor connotates that electricity is easily distributable over long distances without line loss. You can't package electricity like you can other commodities.
Big business wisely does not unwarranted volatility in energy prices resulting from a sham "market".
3)
I would be interested to how the average person would react to your explanation of a market. The market you speak of is not a market in terms of how the average person would expect a market to be. Your "market" is a scheme built on paper trades without the likely delivery of the "product" in the end.
4)
But at what long term cost? Ohio ratepayers shouldn't have to bear the burden of long term costs to cope with Wall Street's short term profit ambitions.
5)
It's up to the generation companies to build the power plants. I wonder how many power plants sites approved by the PUCO have been improved by those companies? Why haven't the power companies built more generation plants in Ohio? Have something to do with the line loss calculations they would have to figure in when figuring out the feasibility of transmitting electricity long distances to the areas that would pay more? Notice I didn't use the word market.
6)
Here, you are full of it. Have you ever looked at anything related to the California meltdown?
Again there is no market.
There wasn't a market to begin with so how can it fail? I agree utility prices are artificially low, but we probably disagree as to the extent.
You are simultaneously confused or misinformed, and self-righteous - a dangerous combination.
I would rather trust the rate setting to a state agency any day rather than rely on some sham paper market...Again, I agree that current rates are probably below where they should be due to regulatory agreements entered into by power companies and regulatory authorities. But, I wonder what would happen to a "market" if the selling companies were related to the buying companies, or if the traders had no interest in receiving the final product...In the end, there is simply too much at stake economically and environmentally for us to allow some sham market to dictate our electricity prices.
During the period 1999-August, 2007 the following electricity rate increases occurred in regulated states:

Nevada 68%
Washington 54%
Florida 50%
Mississippi 43%
Louisiana 43%
Oklahoma 34%

On June 26, 2006, eight leading economists, including George Mason University Professor and Nobel-Laureate Vernon Smith, and Alfred E. Kahn of Cornell University, issued an open letter to policymakers, saying that among economists, it is almost universally accepted that well functioning competitive electricity markets yield the greatest benefits to consumers in terms of price, investment and innovation especially when regulated alternatives are no longer warranted. And, despite currently high electricity prices in many regions, driven by very high fuel input costs used to generate electricity, we are confident that well structured markets and robust competition are providing substantial benefits to electricity consumers.
The letter was also signed by Paul L. Joskow (Massachusetts Institute of Technology), William W. Hogan (Harvard University), Peter Cramton (University of Maryland), Howard J. Axelrod (Energy Strategies, Inc.), David W. DeRamus (Bates White, LLC), and Gary Hunt (Global Energy Advisors).
Level The Playing Field

Avon Lake, OH

#18 Jan 27, 2008

“Lohio Bound”

Since: Oct 07

Location hidden

#19 Jan 28, 2008
Fix the Cause wrote:
First Energy is the new Enron. It will do to Ohio what Enron did to California and Texas. It has already spiked prices in PA. The prices will go up no matter what the Ohio House does or the PUCO unless they go back to full blown regulation. The utilities control the MISO's and PJM's which have become financial trading markets for the Wall Street boys to make money with the FTR's (financial transmission rights) and their no generator left behind method; even the lowest price generator will get the highest price paid for power transmitted. These created high prices will eventually be paid for by the consumer. As long as the generators and the MISO's have no real regulation they will spike the prices up.
Are you frikkin nuts? I'll expound once my blood pressure returns to normal.

Cripes.

“Lohio Bound”

Since: Oct 07

Location hidden

#20 Jan 28, 2008
Solarman wrote:
<quoted text>BEWARE, utilities can and will move generation facilities to other states where they can enjoy a base rate and sell overproduction for a greater rate to Ohio. If you have less generating capacity than the state needs,there is no real supply demand checks and balances on power pricing. Look at the refineries of petroleum products. Gas prices in this country would be lower if more refineries were competing to sell their product. There has been a fairly flat refining capacity in this country since the 1970's.
I'd really like to read how you expect gencos to move their assets to other states. Do you have any idea how large the paperwork pile for environmental issues is to start a new power project, let alone the massive structures required to produce base load capacity? You just don't flip a switch, load it on a truck, and move it to West Virginia.

Again, I'd really like to read your explanation of just how gencos would move assets to another state.

“Lohio Bound”

Since: Oct 07

Location hidden

#21 Jan 28, 2008
Fix the Cause wrote:
First Energy is the new Enron. It will do to Ohio what Enron did to California and Texas. It has already spiked prices in PA. The prices will go up no matter what the Ohio House does or the PUCO unless they go back to full blown regulation. The utilities control the MISO's and PJM's which have become financial trading markets for the Wall Street boys to make money with the FTR's (financial transmission rights) and their no generator left behind method; even the lowest price generator will get the highest price paid for power transmitted. These created high prices will eventually be paid for by the consumer. As long as the generators and the MISO's have no real regulation they will spike the prices up.
"Level" has done a good job refuting so many points. No need to reiterate them when he did such a good job.

There are not duplicate MISOs and PJMs. They are called either RTOs (Regional Transmission Operators) or ISOs (Independent System Operators). MISO and PJM are pre-existinging RTOs, controlling transmission and generation in their respective geographic footprints.

Overall, when do you even think about your electric service? 99.9% of the time, it's when (a) you get your bill, or (b) the lights go out.

Power prices are definitely gonna go up, for reasons listed above, not because of corporate greed. Open markets spur competition. The thing is about the local market is that there's only so much power to go around, the environutz won't allow any new capacity to come on line, demand continues to grow, and we're already in one of the cheapest gen markets in the nation. Fuel, commodity, and environmental expenses continue to soar. The PUCO doesn't control consumer prices any more... it's a new ball game overall.

"No generator left behind..." I LIKE that phrase. Very good!
Solarman

Palm Desert, CA

#22 Feb 2, 2008
Scooter Moonpie wrote:
<quoted text>
I'd really like to read how you expect gencos to move their assets to other states. Do you have any idea how large the paperwork pile for environmental issues is to start a new power project, let alone the massive structures required to produce base load capacity? You just don't flip a switch, load it on a truck, and move it to West Virginia.
Again, I'd really like to read your explanation of just how gencos would move assets to another state.
You must have missed the part of the story where First Energy has separated its energy generation plants from its power distribution. The part of the story where the grid is in need of upgrades and replacement. Many power producers in California had old and low producing plants before deregulation. They sold the property to developers and created a practice of building more energy demand while getting rid of energy production. What's to stop that from happening in Ohio? Does FirstEnergy have generation in other States? I'm sure they'd be glad to sell power for an increased price from one of their out of state generation facilities. If generating capacity beyond demand is not in place by next year, you'll see what I mean.
Gimme more money

United States

#23 Feb 25, 2008
I think we all need to look at the old corporate greed issue here with First Energy. Anthony Alexander since his installtion of CEO of First Energy has made some rather drastic changes in the way the componay is run. The first thing he did was take away the employee discounts on their own energy use. That inspired a lot of loyalty. Another one is he no longer felt it necessary to be competative with the natural gas companies. Those of us who built all electric homes this year were surprised by the new rates that went up to almost 12 cents per kilowatt hour. That is about double what it used to be. Now it is well known that all the 'discount' rates have evaporated and we are foolish to belive that they will honor the 'grandfathered' rates. It is safe to assume that Anthony will find a way yank those as soon as the system deregulates. But what is fueling this change. Anthony says profits are down, well sure they are, everyone's is. But not everyone has to pay a CEO almost 12 million a year salary. Another issue is the high cost of operating their high flying airplanes. Don't try and find them listed anywheres on the stock reports. He has them hid in a 'holding company'. That as well as his custom made $ 60,000.00 dollar throne he had installed on one of his planes I am sure that these little perks are really necessary. Not much we the consumer can do here except bite the bullet and pay out the nose. I assure you even when Anthony is gone we will not see our utility bills go down, stock holders would never stand for that. But a CEO who is a little more 'customer' oriented and not Wall Street driven may help in the future.

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