Default Electric Generation Rates Increasing for Most Ohio Customers Starting June 2021

By Rich Surace posted 22 days ago

  

Since the early 2000s, Ohioans have had the ability to shop for the “generation” portion of their electric bill. This should not be confused with the distribution and delivery charges on the bill which cannot be shopped. The local electric distribution utility (“EDU”) operates the distribution and delivery of electricity which includes managing outages regardless of the generation supplier. Ohio EDUs include AEP Ohio (formerly Columbus Southern and Ohio Power), AES Ohio (formerly Dayton Power & Light), The Illuminating Company, Ohio Edison, Toledo Edison, and Duke Energy Ohio.

Customers that choose not to shop for generation are served under their EDU’s default generation service rates. Since Ohio’s EDU’s do not generate their own electricity, default rates are established through an auction process and attempt to keep rates competitive with current market conditions. However, because the default rates are only fixed for a 12-month period (June – May), unswitched customers could see notable yearly price fluctuations.

All Ohio EDU’s recently submitted their proposed default rates to the Public Utilities Commission of Ohio (PUCO) effective June 2021 thru May 2022. Most customers taking the EDU default generation service will see a rate increase over the next 12 months compared to June 2020 – May 2021.

 

AEP Ohio (includes Columbus Southern and Ohio Power)

All residential and those commercial customers taking secondary service will see increased rates while those commercial customers that take primary service expect decreased rates.

 

Rate Codes

Schedule

Jun '20 - May '21 (per kWh)

Jun '21 - May '22 (per kWh)

Change

001, 003, 004, 005, 007, 008, 011, 012, 013, 014, 015, 016, 017, 018, 020, 021, 022, 028, 038, 062

Residential Service

$   0.05028 

 $  0.05359 

6.60%

206, 211, 212

General Service 1

$   0.04891 

 $  0.05024 

2.70%

207, 215, 218, 231, 233

General Service 2 Secondary

$   0.04852 

 $  0.04945 

1.90%

217, 219, 232, 234

General Service 2 Primary

$   0.04700 

 $  0.04513 

-4.00%

240, 242, 250

General Service 3 Secondary

$   0.04852 

 $  0.04945 

1.90%

205, 244, 246, 254

General Service 3 Primary

$   0.04700 

 $  0.04513 

-4.00%

311, 322

General Service 4 Primary

$   0.04700 

 $  0.04513 

-4.00%

 

AES Ohio (formerly known as Dayton Power & Light)

All Residential and commercial accounts expect an increase.

 

Rate Code - Rate Class

Jun '20 - May '21 (per kWh)

Jun '21 - May '22 (per kWh)

Change

111 - Residential (non-all Electric)

$                     0.0460 

 $                   0.0481 

4.40%

 

 

 

 

141 - Residential (all Electric - Summer Months)

$                        0.0460 

 $                   0.0481 

4.40%

141 - Residential (all Electric - Winter Months)

$                        0.0392 

 $                   0.0413 

5.20%

 

 

 

 

117/127/137/157 - Commercial

$                        0.0460 

 $                   0.0481 

4.40%

 

Summer months: June – October, Winter months: January – May, November – December

 

FirstEnergy (includes The Illuminating Company, Ohio Edison, and Toledo Edison)

All Residential and commercial accounts expect an increase.

 

 

 

Jun ‘20 – May ‘21

Jun ‘21 – May ‘22

Change

Utility

Rate Class

Summer

Winter

Summer

Winter

Summer

Winter

The Illuminating Company

Residential (RS)

$          0.05601 

 $    0.04875 

 $          0.06383 

 $    0.05619 

14%

15%

Commercial (GS)

$          0.05692 

 $    0.04967 

 $          0.05904 

 $    0.05139 

4%

3%

Ohio Edison

Residential (RS)

$          0.05554 

 $    0.04829 

 $          0.06195 

 $    0.05431 

12%

12%

Commercial (GS)

$          0.05714 

 $    0.04988 

 $          0.05911 

 $    0.05147 

3%

3%

Toledo Edison

Residential (RS)

$          0.05631 

 $    0.04906 

 $          0.06406 

 $    0.05642 

14%

15%

Commercial (GS)

$          0.05705 

 $    0.04979 

 $          0.05972 

 $    0.05208 

5%

5%

 

Summer months: June – September, Winter months: January – May, October – December

 

Duke Energy Ohio

The changes in Duke Energy Ohio are not as straightforward compared to other Ohio utilities due to tiered rate structures dependent on usage and season. To keep it simple, we will make some general assumptions on each rate class.

 

RS - Residential

All residential accounts will see a 1.5 percent increase during the summer months (June – September) with the June ’21 rate coming in at $0.0544 per kWh compared to $0.0536 per kWh for May ‘21.

During the winter months (January – May, October – December), those residents using less than 1000 kWh will see changes in their rates similar to the summer months.

If a resident uses more than 1000 kWh during the winter, they pay a lower rate for all usage above 1000 kWh and on average should expect to pay around 1 percent more than last winter.

 

DM – “Small” Commercial

This rate class has a tiered rate structure depending on monthly usage. Keeping it simple, “DM” customers that use less than 2800 kWh in a month should expect around a 2.2 percent decrease on their generation rates in June ’21 compared to May ‘21. Those using between 2800 kWh and 5000 kWh will see a negligible impact while those using more than 5000 kWh increase by roughly 1.6 percent.

 

DS – “Large” Commercial 

The easiest way to understand this rate class is by looking at the “Load Factor” which measures how efficiently a customer’s daily energy compares to their peak demand in a month.

Simplified Load Factor Formula: [Monthly Billed kW * 720 hours] / Monthly Consumption (in kWh) = Load Factor %

Why 720 Hours? We will assume there are 30 days a with 24 hours a day in each read month.

Here is a generalized table on the changes in Duke Energy Ohio’s default generation rates based on Load Factor…

 

Load Factor

Change in Rate

10%

14%

20%

5%

30%

1%

40%

-2%

50%

-4%

60%

-6%

70%

-7%

80%

-7%

90%

-8%

100%

-9%

 

 

Conclusion

There is a lot to digest above and as you see it varies greatly depending on which EDU an account resided. It is important to understand the impact these changes may have on your school’s costs and operations and possible ways of reducing the impact of these impending changes.

 

Rich Surace is the Chief Operating Officer at Energy Alliances. 513.794.5555 | rsurace@energyalliances.com

 

Energy Alliances is an OASBO Benchmark Program Provider. Click here to learn more.

 

Disclaimer: Above is an attempt to give readers a general sense on how rates may adjust this summer if taking default generation service from the local EDU based on rates filed in mid-May ‘21. EDU’s can adjust rates as needed. The reader should use the information above as reference and not make any decisions until speaking with an energy professional or researching their own individual situation.

 

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