1. MICA Newsletter November 2011
FirstEnergy Update Natural Gas Update
FirstEnergy’s generation rate plan provides for a series The NYMEX settlement price at the end of October
six auctions to determine the default generation rates was $3.524 per thousand cubic feet (Mcf), down 6%
for the 3-year period beginning on June 1, 2011. On from $3.759 at the end of September. For Dominion
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Tuesday, October 25 , the third auction was held. This East Ohio commercial and residential customers under
auction secured tranches to provide generation supply Choice, the price to beat is NYMEX plus $1, or $4.524
for the period from June 2012 to May 2014. The per Mcf in November. Columbia Gas of Ohio’s price to
auction cleared at a price of $52.83 per megawatt hour beat is NYMEX plus $0.188 per hundred cubic feet
(MWH), which is about 10% lower than the clearing (CCF), or $0.5404 per CCF for November.
prices in the auction that was held in January 2011.
After this result is averaged with the prior tranches, the One Mcf of natural gas is approximately equal to 300
default rates will drop by about 1.5% next June. kWh of electricity. At a burner tip price (including
delivery, taxes, and riders, as well as the natural gas
Note that this average wholesale price will be itself) of $7 per Mcf, electricity would have to cost less
converted to retail rates by the three FirstEnergy than 2.4¢/kWh to match it. We recommend that you
utilities and will vary by rate schedule and season. If consider the possibility of switching some heating or
you have contracted with a retail electric supplier for processing from electricity to natural gas.
generation services, this result will only impact the
amount of your savings.
Welcome to our new MICA member
Olmsted Ice
Olmsted Township, Ohio
Competitiveness of Ohio Utilities
In the past, FirstEnergy’s electric rates were not only
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the highest in Ohio but also in the top 20 percentile of
the United States. At the same time, American Electric CALENDAR OF EVENTS
Power’s rates were not only the lowest in Ohio, but
they were also typically some of the lowest in the YOUR ENERGY BILL: MANAGING COST, ACHIEVING
country. While the costs for FirstEnergy customers EFFICIENCY
have fallen over the last 5 years due to open-market NEWBURY BUSINESS PARK
competition, AEP’s Ohio Power rates have increased
12373 KINSMAN ROAD, NEWBURY
74% and Columbus Southern Power rates have
increased 64% since 2004. NOVEMBER 9, 2011, 8:00 A.M. TO 10:30 A.M.
This is a complimentary event for businesses in Geauga
County sponsored by the Geauga Growth Partnership
FirstEnergy customers now have an electric cost
and Brakey Energy. Continental breakfast included.
advantage over their competitors in AEP territory. AEP Register at info@geaugagrowth.com or 440-564-1060.
is requesting an increase in rates and provisions that
would prevent its customers from seeking relief through 16TH ANNUAL OHIO ENERGY MANAGEMENT
generation shopping. On behalf of MICA members CONFERENCE
served by AEP, IEU-Ohio continues challenging AEP THE COLUMBUS RENAISSANCE HOTEL
before both the PUCO and Ohio courts to open up 50 NORTH THIRD STREET, COLUMBUS
generation competition and to keep electric rates fair
FEBRUARY 21-22, 2012
and reasonable throughout Ohio. Contact us if you
See www.mecseminars.com for more information.
have any questions about your situation.

2. 3309 Glencairn Road, Shaker Heights, Ohio 44122 (216) 751-1758
AEP-Ohio Update
Provider of Last Resort (POLR) Charges
AEP-Ohio’s electric rates include a Provider of Last Resort (POLR) charge that was intended to compensate
AEP for the risk of both customer migration to retail electric suppliers and customers returning to AEP for
generation services. Several parties, including the Industrial Energy Users – Ohio, challenged this charge in
court. In April, the Ohio Supreme Court directed the Public Utilities Commission of Ohio (PUCO) to reconsider
the appropriateness of the POLR charge. The PUCO recently determined that the POLR charges are not
appropriate. The PUCO directed AEP to refund the amount of POLR charges collected since June of 2011 by
credits on customer bills beginning in November.
Rate Proposal
Columbus Southern Power (CSP) and Ohio Power (OP) have proposed new rate plans to be effective on
January 1, 2012. Testimony is ongoing before the Public Utilities Commission of Ohio (PUCO). IEU-Ohio is
providing testimony on behalf of its members, including all MICA members.
The PUCO’s POLR-eliminating decision has impacted AEP’s Electric Security Plan (ESP) generation rate
proposal. The PUCO must find that the ESP is better in the aggregate for consumers than a Market Rate
Option (MRO) before the PUCO can approve an ESP. The elimination of the POLR charge causes the ESP
versus MRO test to fail.
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On Monday, October 24 , a settlement was reached in a Duke Energy Ohio ESP case. This settlement is very
different from the settlement that was proposed for the AEP case and could highlight some problems with that
settlement. The PUCO could point to provisions in the Duke settlement for purposes of modifying the AEP
proposal.
The current rates will stay in effect until a final rate plan is approved by the PUCO. It is highly likely that a new
rate plan will not take effect until sometime after January 1, 2012. Contact us if you have any questions about
your situation.
The Brakey Energy Team
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