Fayette offered electrical rate discount 02.10.10

Written by David Green.


First Energy is offering Fayette residents a reduction in their electricity costs providing they agree to stay with the utility for nine years.

The village government—considered the buyer of electricity—has to decide whether or not to place the issue on the May ballot.

Gary Keys of First Energy’s Wauseon service center, explained the offer at the Jan. 28 council meeting, stating that a decision about whether or not to place the issue on the ballot would have to be made by Feb. 19.

If approved by voters, the nine-year agreement would begin in July. The reduction is being offered to all communities in Toledo Edison’s service area, he said, and is already approved for the May election in Wauseon, Archbold and Defiance.

The contract would give a six percent discount to residential customers and four percent to business customers, only on the electrical generation portion of the bill. Keys said that represents about 35 to 40 percent of the bill. Current electrical rates would be locked in for the nine-year period.

The offer does not apply to larger industries, he said, since they already shop for their own rates.

Approval by Fayette voters will also result in a $50,000 grant to the village that can be used for any purpose.

The purpose of the program, Keys said, is to lock in customers for nine years to discourage the village from looking elsewhere for electricity. This would help First Energy manage its long-range investment in buying coal, he said, by forecasting who the utility’s customers will be five and 10 years into the future.

Audience member Kirk Keiser asked why there might be fewer customers in the future. Keys said economic conditions could cause changes.

If passed by voters, all electricity users in the village would be enrolled in the program, Keys said, but if something better comes along, each individual has the ability to opt out for a one-time fee of $25.

Audience member Craig Rower noted that it would cost the village millions to install new power lines if it chose to go with another provider. Why not just give the discount without a vote?

“Some people won’t want to change,“ Keys said. “They’ll want to opt out. They’ll say they want to stay with Toledo Edison.”

Another audience member, Gene Beaverson, said that if First Energy can afford to give the rebate and the grant, why not simply reduce the rate?

Keys answered that a rate reduction would have to be approved by the Public Utilities Commission of Ohio (PUCO).

“You can’t will something onto somebody that they don’t want,” he said. “It has to go to the voters.”

Beaverson questioned whether a rate discount has be to approved by PUCO and Keys answered that this discount program has to be approved. What about just the discount? Beaverson asked.

“It’s the same thing,” Keys answered.

Beaverson said he finds it hard to believe that PUCO would turn down a proposal to give Northwest Ohio a five percent discount.

“I don’t know,” Keys said.

Council member Tom Molitierno said there are ways to save six percent on costs without a long-term commitment, such as through home weatherization projects.

Village administrator Amy Metz said another workshop is planned in March to discuss energy savings programs.

Keys reminded the audience that anyone can opt out of the program at any time, whether or not another electrical provider is available.

“You can opt out any time. If a third party comes in, you have that option,” Keys said.

He said the utility faces a mandate to reduce electrical usage by 25 percent before 2025. The utility continues to look for ways to increase efficiency.

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