OCC Consultant's Search for Restructuring Documents Nets Preliminary Findings
27 October 2003 - 9:54PM
PR Newswire (US)
OCC Consultant's Search for Restructuring Documents Nets
Preliminary Findings COLUMBUS, Oct. 27 /PRNewswire/ -- The Ohio
Consumers' Counsel (OCC), the residential utility advocate, today
released preliminary findings and draft testimony from LaCapra
& Associates, the Boston-based energy consultant used by the
OCC during the electric restructuring process. The documents were
retrieved as a result of an extensive computer network scan
conducted by LaCapra at the request of the OCC due to public
interest in verifying the consultant's preliminary evaluation of
FirstEnergy's "stranded costs." Based on its records retention
schedule, the OCC had disposed of many of the documents related to
LaCapra's preliminary findings. LaCapra's estimates only relate to
the generation portion of FirstEnergy's stranded costs. Regulatory
cost estimates were not performed by the consultant but were
conducted internally by the OCC. All of the estimates were devised
to strengthen the OCC's negotiating hand and give the agency an
aggressive litigation position. LaCapra's initial assessment from
January 2000 gave an estimate of between $2.2 and $4.4 billion for
the generation portion of the stranded costs. "As we got closer to
the hearing date, the other major groups involved concluded they
were going to settle this case," said Robert S. Tongren, Consumers'
Counsel. "The choice we made was to participate in the negotiations
and gain additional benefits for consumers rather than litigate a
case that, more likely than not, we would have lost." Nineteen
other stakeholders, including the staff of the Public Utilities
Commission of Ohio and other consumer groups, signed on to the
agreement. Stranded costs are collected by FirstEnergy through
customers' electric rates to pay for the company's power plant
investments. Residential electric customers had been paying these
costs all along, and would have continued to pay them indefinitely
if it had not been for restructuring. Customers of FirstEnergy are
paying no more for their electricity today than they were 10 years
ago. In fact, many of them are paying less as a result of the
competitive marketplace. As a result of the OCC's negotiations,
FirstEnergy customers received: - Low-cost energy called "market
support generation" made available to alternative suppliers served
to jumpstart electric choice savings in northern Ohio. The
discounted price of the power has worked to produce savings of as
much as 20 percent off the generation part of customers' electric
bills. The OCC was the only advocate office in the country to
obtain this type of low-cost energy for residential consumers. - A
"shopping credit" that has helped save customers money when
switching to an alternative supplier. By negotiating a higher
shopping credit than proposed by FirstEnergy, suppliers are better
able to beat FirstEnergy's price and produce customer savings.
Currently, 44 percent of FirstEnergy's customers have switched to
an alternative supplier. - Customers' rate credits, which the OCC
had negotiated in 1995 and 1998 merger cases, were extended an
average of two years and will produce $150 million in savings past
their original expiration date of December 31, 2005. Beyond the
advantages of jumpstarting the competitive market, the OCC
successfully negotiated a two-year extension of the freeze on
FirstEnergy customers' distribution rates, set to expire under the
restructuring law on December 31, 2005. Now, distribution rates are
frozen through December 2007. LaCapra's preliminary findings and
draft testimony can be found on the OCC's website at
http://www.pickocc.org/ . About the Ohio Consumers' Counsel The
Ohio Consumers' Counsel (OCC) is the residential utility advocate
serving as a resource for individuals who have questions and
concerns or would like more information about the services provided
by their publicly owned electric, natural gas, telephone and water
companies. The state agency also educates consumers about utility
issues and resolves complaints from individuals. To receive utility
information brochures, schedule a presentation or file a utility
complaint, residential consumers may call 1-877-PICKOCC
(1-877-742-5622) toll free in Ohio or visit the OCC website at
http://www.pickocc.org/ . DATASOURCE: Ohio Consumers' Counsel
CONTACT: Contact: Ryan Lippe of Ohio Consumers' Counsel,
+1-614-466-7269 Web site: http://www.pickocc.org/
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