Utility auctions help bring down electricity rates in Northeast Ohio

Reporter Bill Cohen

   People across Northern Ohio are going to see the rates on their monthly bills go down over the next two years, thanks to an auction. The state's new utility law says customers are entitled to the lowest rates, whether they are regulated or set by the free market. It turns out that, in this case, nine electricity providers indicated in an auction that they'd be willing to see wholesale power at a cheaper rate than they one that utility regulators had set for First Energy, the main electric company for Northeast Ohio. Ryan Lippe speaks for the consumer advocate Office of the Ohio Consumers Counsel. He said the competition proved that First Energy's rates were too high.

    "They had about 7.5 cents being the generation price. The auction that we've seen over the last couple of days drove the price down to about 6.1 cents. So that is significant when customers are using 1,000 kilowatt hours a month and it shows that the wholesale system can work to at least provide a check on regulated prices, at least provide some avenue for customers to potentially save," Lippe said.

    There's a big irony in the development. When Ohio lawmakers approved a new utility re-regulation bill last year, electric companies opposed key provisions. They wanted a different thrust that would downplay government regulation and emphasize de-regulation and competition. Now, in the case of energy giant First Energy, it turns out that competition will cost the company some business.