Energy / Fixed Rate Hikes

What Ohioans are saying about fixed charge hikes proposed by electric companies

Rachael Belz, Executive Director, Ohio Citizen Action

Commentary from Ohio Citizen Action Executive Director Rachael Belz

Who wants to talk about household bills, right? It’s not exactly the most fun topic, but for the past few months, we’ve been out in neighborhoods across Ohio knocking on doors to talk with residents about just that subject – more specifically, about electricity bills.

Here’s why: some Ohio electric companies are now proposing some steep fee increases on customers’ bills. They’re using a billing tactic that’s especially unfair because: it hits hard on those who use the least energy; on those who can least afford to pay more; and on those who want to support or invest in saving energy through efficiency upgrades or solar.

Here’s what’s being proposed:

  • AEP Ohio wants to more than double its fixed monthly charge on your bill – up to $18.40 a month.
  • Duke Energy Ohio wants to nearly quadruple their fixed fee – up to $22.77 a month.
  • Dayton Power & Light also has a proposal to triple its fixed charge.
  • First Energy will announce a fixed-fee hike soon too.

What’s a fixed charge and why is raising it such a problem?

If you don’t often look closely at the different kinds of charges on your utility bill, don’t worry, you’re not alone – this is why we’ve been out talking to people one-on-one.

There are two kinds of charges on your electric bill:

  1. charges based on the amount of electricity you use, and
  2. a “fixed charge” or “customer charge” that you pay before the meter starts running – before you ever flip on a light. This is the charge that all these utilities here in Ohio are proposing to raise, and if they do there’s nothing you can do to avoid it or reduce it.

Other utilities around the country have been trying to do this as well, and mostly the folks who oversee these kinds of proposals – utilities commissions like our Public Utility Commission of Ohio (PUCO) – have been rejecting or dialing back utility mandatory fixed-charge hikes because of the basic unfairness to bill payers. As we’ve been explaining the issue to Ohioans, we’ve been hearing the same.

Let me take you on a little “tour” of what we’ve been hearing. People are so upset by the prospect of paying what amounts to an extra one or two utility bills per year that they’re writing personal letters to PUCO to urge denial of the rate increase. Here’s what they’re saying:

In Grandview Heights, AEP Ohio customer Michelle Peterson highlighted the hardship for working and lower-income families, who would be hardest by the increases. Fixed fee rate hikes typically consume a larger share of the incomes of those who are least able to pay, forcing unacceptable compromises. Her letter to the PUCO says:

“I am a widow, and a mother of one minor child, who recently became ill with a chronic condition. I am a social worker. I work full time, clinically assessing and treating persons in mental health crisis. My daughter’s illness has reduced my work hours, and if my electric bill with AEP rises, it reduces from my budget of food, medication, hospital bills, treatment costs, clothing and any other expense you’d expect to have as a mother. Having electric is not an optional expense like cable or vacations. It is necessary, sometimes even radically so.

“I would ask that it be advocated that AEP not raise their rates. There are so many people living paycheck to paycheck and just trying to get by.”

AEP Ohio Columbus customer Jeana Wigglesworth made a similar point, very succinctly. Her letter to PUCO says:

“I live on a fixed income. Please don’t let this pass. I can’t pay all my bills now. As the saying goes ‘you have to rob Peter to pay Paul.’”

Fixed-fee hikes take away bill payer’s freedom to control electric bills and their ability to recoup energy-saving investments. When you must pay more each month, even if you don’t use more electricity, it’s harder to control your household energy costs. It also makes it harder to save as much money from investments that reduce the energy you need from your utility, such as efficient appliances, better insulation, or even a home solar system.

AEP Ohio Columbus customer Rebecca J. Huffman talked about the hardship for a senior on a fixed income, who is already doing everything she can to conserve energy. Her letter to PUCO says:

“I am a senior citizen who can ill-afford to pay higher rates for my utilities as I am on a fixed income. My thermostat is set at 66o in winter; my air conditioning at 80-82o in summer. My furnace and air conditioner are fairly new and rate energy-efficient, as are my washer and dryer and gas range and refrigerator. All my windows have been replaced within the past two years. I have done everything I can to help reduce the cost of utilities and now you want to nearly double your (fees). I say enough is enough.”

AEP Ohio Columbus customer Sara Balderston also expressed concern about undercutting her efforts to use energy efficiently. Her letter to PUCO says:

“The idea of increasing fixed fees is ill-conceived, because it discourages conserving energy. My family tries hard to remember to turn off lights, minimize use of our air conditioning and clothes dryer, and we and others who conserve electricity should be rewarded, not discouraged by having to pay mandatory fixed fees. Additionally, many households are on fixed incomes and for them this increase will especially be a burden.”

These rate increases are not a “done deal”. You can help stop them now by writing your own comments to PUCO. Be sure to include the AEP case number and describe how a rate increase might affect your family and budget.

AEP Case Number: 16-1852-EL-SSO

Public Utilities Commission of Ohio

180 East Broad Street

Columbus, OH 43215

More information is available about fixed fee increases, including upcoming PUCO hearings where AEP Ohio customers can express their views.

Rachael Belz is the Executive Director of Ohio Citizen Action, the premier grassroots mobilizing and organizing team in the Midwest.

Ohio Citizen Action organizes and mobilizes people to advocate for public interests. In person, by phone, and online, we engage people in actions that protect public health, improve environmental quality, and benefit consumers. Our campaigns connect Ohioans and build a movement to protect democracy and create a sustainable future.