(NOTE: None of these proposals was accepted in their entirety as the final PUCO Commission Decision, but portions of each were used).
In order to better understand the proposed solutions, it is important to note that the temporarily reinstated all electric discount was comprised of three separate credits (during Winter of 2010 - 2011).
· Credit EDR applies to all usage above 500 kwh and is 1.9 cents for all companies
· Credit RDC applies to all usage above 500 kwh and is 1.7 cents for CEI, 1.77 cents for OE, and 1.76 cents for TE
· Credit RGC applies as follows:
o For CEI, 4.2 cents for all usage
o For OE, 3.9 cents for usage above 1,250 kwh
o For TE, 1.8 cents for usage above 2,000 kwh
FirstEnergy’s Proposed Long-Term Solution
· Eliminate the RGC credit beginning in September 2011 for load management customers who do not also heat with electricity. FE estimates this will reduce the 318,000 customers currently receiving the RGC credit by 109,400.
· Eliminate the RGC credit beginning in September 2011 for customers who do not demonstrate a usage pattern indicative of heating with electricity (i.e. those who heat with wood). FE estimates this will further reduce the customers receiving the RGC credit by 49,600. Overall, FE estimates this will reduce the 318,000 customers currently receiving the RGC credit to 159,000.
· The remaining 159,000 customers who heat with electricity will have their RGC gradually reduced down to 0 over an estimated 3 years.
· FE proposes no immediate change to the EDR and RDC credits, but does not guarantee the longevity of these credits. FE states that their purpose is to transition AE customers toward paying the full, standard residential rates.
PUCO Staff Proposed Long-Term Solution
· Eliminate the RGC credit beginning in September 2011 for load management customers who do not also heat with electricity.
· The remaining customers will have their RGC gradually reduced down to 0 over an estimated 5 years.
· Beginning in year 2 of solution, the RGC credit will be capped at 7,500 kwh. This means no RGC discount will be given on kwh used above 7,500 kwh.
· Beginning in year 2 of the solution, the EDR credit will be eliminated for water heating only customers.
· The PUCO Staff proposes no immediate changes to the EDR and RDC credits, but do not guarantee their longevity.
OCC/CKAP Proposed Long-Term Solution
· Maintain a long term combination of the EDR, RDC, and RGC so that the net effect of the three credits will equate to an ongoing 35% discount for AE customers off the standard residential rate.
· The actual amount of the RGC credit could vary up or down each year depending on whether the standard rates vary. However, the 35% relationship of AE rates to standard rates will always be maintained.
· This solution is based on the historical precedence of offering an average rate differential for AE customers of 35%.