Farmer: Energy promotion confusing

DAVE MOSIER/independent editor

If the aggregation process wasn’t confusing enough, the utility providing electric rate savings through the program is itself muddying the waters with a new promotion, according to Van Wert Mayor Don Farmer.

Farmer noted Friday that FirstEnergy Solutions, which is providing AEP utility customers with a decrease in their electric generation rate from the current AEP rate of 7.2 cents per kilowatt hour to 5.85 cents/KWH, has sent out a new mailer offering customers a guaranteed rate of 6.99 cents/KWH over the next seven years. While the aggregation rate is lower, it is guaranteed for only two years, the mayor noted.

The mayor noted that local AEP customers who did not opt out of the aggregation program are currently at the 5.85 cents/KWH rate. “That’s where they are and they are with FirstEnergy, if they did not opt out,” Mayor Farmer noted.

Using his own utility bill as an example, the mayor said he stands to save $200 a year if he uses 15,000 kilowatt-hours a year under the aggregation program. That’s a saving of 18.75 percent annually over the 7.2 cents/KWH that AEP is currently charging – a rate Mayor Farmer said he feels is a good one.

His concern is that a new FirstEnergy mailer received by many local AEP customers on Friday will be confused with the aggregation program, leading some people to opt out of the aggregation program and take the new program without understanding that the consequences.

Mayor Farmer was quick to note that he’s not against the new FirstEnergy offer, stating that, if energy costs rise significantly over the next seven years, the new program, which guarantees a 6.99-cent/KWH rate over that period, could be a good move for utility customers.

“I can’t predict, as the mayor or as an individual, what the rate is going to be (down the road),” Mayor Farmer said. “I can’t advise (local AEP customers) what to do.”

The problem for the mayor, though, is that the new offer, which comes in the wake of aggregation program implementation, could confuse some utility customers into thinking the latest promotion is part of the aggregation program – especially since it comes from FirstEnergy Solutions, which also administers aggregation locally.

In addition, anyone who opted out of aggregation to take the new offer would likely have to pay a penalty if they decided to return to the aggregation program, say in two years, when new rates are negotiated.

Furthermore, while aggregation offers only a two-year rate guarantee, Mayor Farmer said he feels the program should also be able to come up with a competitive electric power rate when it is opened up to new utility company bids in two years.

The mayor said he personally feels more companies will submit bids in two years, making it more likely that those on the aggregation program will again receive a good electric power rate. FirstEnergy was the only company to submit a bid this year when the aggregation program’s initial bidding process began, he noted.

For local AEP customers wanting more information on the issues involved, he recommended calling the Public Utilities Commission of Ohio help line at 800.686.PUCO (7826) or accessing the PUCO’s website at www.puco.ohio.gov.