Office of the Ohio Consumers' Counsel

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In this issue:

• Electric choice deserves a chance to succeed
• New materials assist residential consumers
• The facts about utility line insurance
• Energy Efficiency Tips
• Q&A: Call blocking services

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Electric choice deserves a chance to succeed

January 2005 marked the beginning of the fifth year of electric choice in Ohio. While progress has developed slower than many policymakers had anticipated, the Office of the Ohio Consumers' Counsel (OCC) believes that more choices and savings opportunities may be on the horizon once some obstacles to competition are removed.

Electric choice allows customers to shop for an electricity offer based on factors like price and the source of the electricity (for example, renewable power). Competition also motivates electric companies to keep their power plant costs reasonable.

Early successes

Based on Ohio's electric choice law, customers of investor-owned electric companies were assured that rates would not increase for five years beginning in 2001. In addition, residential customers who remained with their local electric company have saved $506 million thus far as a result of a 5 percent reduction on the generation portion of their bill since January 2001. Beyond the law's built-in savings, over 900,000 homes have switched to a competitive electric supplier. This switching has primarily occurred through governmental aggregation programs in northern Ohio. Aggregation occurs when local governments and community groups form energy buying pools to save customers money. Over 190 communities have taken advantage of this opportunity. Aggregation has been a success story for Ohio's electric choice program.

More progress is needed

It is important that along with promoting aggregation, existing barriers are removed to better allow competitive suppliers to market to individual customers.

For example, action will be taken later this year to launch short-term wholesale electric markets in part of the Midwest. These markets will allow suppliers to purchase power on a timely basis in response to changing demands due to weather or the economy. In addition, the markets will make electricity available from a greater variety of sources, potentially including renewable power.

Beyond opening short-term wholesale markets, work also needs to be done to ensure that suppliers have fair and open access to the transmission system needed to move electricity into and around Ohio.

Harmful rate plans

Ohio's three largest electric companies - American Electric Power (AEP), Cincinnati Gas & Electric (CG&E) and FirstEnergy - have submitted plans to the Public Utilities Commission of Ohio (PUCO) that would likely cause rates to increase beginning next year.

The OCC believes these rate plans harm consumers, violate the electric choice law and further obstruct competition. The PUCO has approved plans for AEP, CG&E and FirstEnergy, setting the stage for generation rates to remain high in northern Ohio and significantly increase in other parts of the state in 2006.

In addition, while the law requires that a competitive bidding process be used which could lower customers' rates in 2006, such a bid will not be conducted under AEP's and CG&E's rate plans. A bid conducted last December in FirstEnergy's area was not designed in a way that would provide consumers the best chance at receiving lower rates. The OCC has asked the PUCO to reconsider its approval of the AEP and CG&E rate plans and has appealed the FirstEnergy decision to the Ohio Supreme Court.

Continuing electric choice

The OCC is supportive of continuing the work necessary to provide residential customers with the ability to choose from several electric suppliers and potentially save money. The slow growth of the energy market means that both patience and persistence are needed to fulfill this vision.

Ohio should examine its experience and determine what has worked, what has failed and what can be done to further enhance customer choice so that it delivers benefits far into the future.

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New materials assist residential consumers

To assist Ohioans with the ever-changing world of utilities, the Office of the Ohio Consumers' Counsel (OCC) has prepared new education materials on several topics.

 

Tree trimming:The topic of trimming trees away from power lines has been a topic of much discussion since the August 14, 2003 blackout. Information on company policies and the appropriate types of trees to plant near or around power lines is included.

Authorized payment centers: The OCC offers information that directs consumers to a list of authorized payment centers approved by the utility company where consumers can make payments.

Historical regulated natural gas rates: Consumers who wonder about how much they paid for natural gas in the past now have a way to find that information. The OCC has collected information on the gas cost recovery (GCR) rate for the four major natural gas companies in Ohio to provide a four-year history. The fact sheet is updated every time the companies change their GCR rate.

What you need to know about Voice Over Internet Protocol (VoIP): VoIP is a relatively new service that allows consumers to have both local and long-distance telephone service over existing high-speed Internet connections. The fact sheet outlines the basics of VoIP, essential equipment, public safety issues, consumer protection issues, advanced features as well as potential savings.

A Guide to the Home Weatherization Assistance Program (HWAP): This fact sheet offers information about the federally funded HWAP program, which is administered by the Ohio Department of Development. Information about the free services provided through the program, eligibility requirements for HWAP and how to apply for additional financial assistance is included.

To request a copy of these or any of the OCC's free educational fact sheets, consumers can call toll free at 1-877-PICKOCC (1-877-742-5622) or view them online at www.pickocc.org under "Fact sheets and Publications."

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The facts about utility line insurance

Typically, when consumers have a problem with their electric, natural gas, telephone or water service, they contact the utility company to fix the problem. However, not all problems are the responsibility of the utility. Consumers are generally responsible for paying costs associated with the utility lines that run from the curb into their home. While utility line insurance programs, usually offered by the company, may help ease the expense consumers must pay to have the repairs made, it may not be in the best interest of the consumer to purchase these programs.

Electric, Natural Gas and Water
When you contact the utility company to fix a problem, line insurance provides partial to full payment for work performed on your electric, natural gas or water line.

Telephone
Most local telephone companies offer "Inside-Wiring Maintenance Plans" that cover repairs to any wiring problems found inside your home.

Issues to consider before signing up for a line insurance plan

• Many consumers may never need to replace or have repairs made to a utility line.
• These programs cost an additional fee, some between $3 and $10 per month with coverage amounts ranging between $1,000 and $4,000 toward applicable repairs or replacements.
• Talk with your neighbors and see if any of them have had to schedule repairs or replacements. If you live in an older neighborhood (over 40 years old) where pipes and lines are still the originals or if your neighbors have had replacements, you may want to consider purchasing a plan.
• For telephone lines, most problems typically occur every 20 to 30 years.
• Most companies will not cover repairs to pre-existing conditions, such as cracks in the line, and have provisions to inspect the insured line within a few months of the program start date.

For more information on utility line insurance programs contact the OCC at 1-877-PICKOCC (1-877-742-5622) toll free or visit www.pickocc.org and request "The facts about utility line insurance."

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Q & A: Call blocking services

Q.Can telephone customers block "pay-per-call" (900 and 976) numbers from being dialed from their home?

A. Most local telephone companies offer a service that prevents outgoing calls to these numbers. Typically this type of blocking service is free to customers who request it when they establish their telephone line. A one-time activation fee is sometimes required for those with existing telephone service.

Q. Can customers prevent anyone in their home from accepting collect calls?

A. Some local telephone companies offer to block collect calls. However, depending on the company, a one-time activation fee and an ongoing monthly charge may be required.

Q. If a customer has not selected a long-distance provider, can he or she still make long-distance calls?

A. Customers should know that even if they have not chosen a long-distance provider, long-distance calls may still be made from their home and billed at a high per-minute rate.

Q. How can a customer block anyone from making a long-distance call from their home?

A. Most local telephone companies offer a service known as "toll restriction" or "toll blocking" that prevents local toll, domestic and international calls from being made. There is often a one-time activation fee and a monthly charge for this service. Toll-free calls can still be dialed but "10-10" dial-around codes typically cannot be accessed.

Q.How much are the activation and monthly fees, if required?

A.Fees vary by company and blocking service, but usually the one-time activation fee is between $5 and $10. Monthly fees are ordinarily between $3 and $6.

Q.Is it possible to block only international calls from being dialed?

A.Most local telephone companies do not offer a specific blocking service for international calls. Many long-distance companies can block their customers' international calls, however any calls using "10-10" dial-around codes will still be able to be placed.

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Ohio Consumers' Corner is the free bi-monthly newsletter of the Ohio Consumers' Counsel, the residential utility advocate serving as a resource for consumers who have questions and concerns, or would like more information about the services provided by their electric, natural gas, telephone and water companies.

OCC has had to cancel many of its services, including its consumer call center, due to recent budget cuts. We realize you may continue to need assistance with your utility services. OCC's website provides free access to publications and resources.

You may seek assistance with utility complaints from the Public Utilities Commission of Ohio: 800-686-7826. For complaints about non-utility related services, you may call the Ohio Attorney General at 800-282-0515.