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PUCO Considers Distribution Rate Hike for DP&L

December 11, 2015 By Cheryl Kaften

Dayton Power and Light (DP&L), a utility that services more than 515,000 residential, commercial, and industrial retail electric customers in West Central Ohio, filed an application with the Public Utilities Commission of Ohio (PUCO) on November 30 for an increase in its base distribution rates – the first such request, the company claimed, “in nearly a quarter century.”

rate hike, which would be effective with the first billing cycle in January, would raise the bill of a typical 1,000 kilowatt-hour (kWh) residential user by 3 percent, according to the company – or about $4/month. In total, DP&L is requesting to boost to its revenue requirement in the amount of $65.8 million.

Since 1991, DP&L said, it has not changed or increased its base rates for electric distribution service – charges that are partially responsible for recovering costs associated with maintaining the poles and wires and other distribution infrastructure that bring electricity into customer’s homes and businesses. During those years, DP&L stated in its application, its cost of providing electric service has increased, and DP&L has invested about $1.1 billion in its distribution system for greater reliability.

“The proposed rates reflect those investments,” DP&L said in its filing. “In reviewing [our] application, the commission will consider DP&L’s cost to provide electric distribution  service from June 1 [of this year] through May 31, 2016; and the value of DP&L’s poles, wires, and other equipment used to deliver distribution services as of September 30, 2015.”

The rates proposed in the application are based on Straight-Fixed Variable (SFV) rate-design principles. Use of those principles means that a greater portion of the proposed base rates will be recovered through a fixed customer charge, while the remaining costs will be recovered through a variable energy or demand charge. In relying on those principles, DP&L stated that it “intends to treat similarly situated customers alike and help keep rates for electric distribution services more steady throughout the year.”

DP&L also proposes:

  • A Storm Cost Recovery Rider designed to collect costs associated with major storm events;
  • A Regulatory Compliance Rider designed to collect costs associated with deferred regulatory assets;, and
  • An Uncollectible Rider, intended to provide for collection of bad debt resulting from unpaid bills.

Shortly after DP&L announced its intent to file for a rate hike, the Ohio Energy Group, a nonprofit organization that advocates on behalf of large industrial customers in electric and gas regulatory proceedings before PUCO, made a motion to intervene. Group members participating in the intervention include Cargil, General Motors, and Timken Steel. These companies purchase electric distribution services from DP&L, and will protect their interests during the commission’s proceedings.

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