Toledo area residents offered choice in rates

For the first time since 2005, metro Toledo residents have the chance to choose their electricity rates - either staying in a bulk buying group with a reduced rate or opting out and getting a higher rate set by state regulators for FirstEnergy Corp.'s Toledo Edison customers.

The nine metro communities that make up the Northwest Ohio Aggregation Coalition, the bulk buying group, sent notices that allow their citizens to opt out of a deal to buy electricity that the coalition negotiated with FirstEnergy Solutions, which is a FirstEnergy subsidiary.

By doing nothing, residents of Toledo, Maumee, Northwood, Oregon, Sylvania, Perrysburg Township, Holland, Lake Township, and those living in incorporated parts of Lucas County will automatically get a new rate of 6.4 cents per kilowatt hour - which would provide an average saving of $30 to $40 annually. The deal runs through May, 2011.

Residents who do not want to be part of the deal must fill out the form they received by mail and return it by August 7.

If they do so, their current power provider, Toledo Edison, will continue to supply them electricity at a rate closer to 6.5 cents. Those customers will not be able to buy their electricity from another provider.

"I don't expect a very high percentage of opt-outs. [The saving] is not a huge amount, but why would you not take it?" said Leslie Kovacik, a city of Toledo attorney who represents the aggregation group.

The bulk buying group first negotiated a two-year deal with FirstEnergy Solutions in 2001 and renegotiated a two-year deal that expired in 2005. Since then, however, competition in the power industry has been nonexistent until recently.

A state-run power auction this year drove prices down, prompting FirstEnergy Solutions to offer discounted power to aggregation groups and individuals living in certain areas.

A total of 47 Ohio communities ended up negotiating deals to buy discounted power from FirstEnergy. A large coalition in eastern Ohio bought power from an alternative supplier, Gexa Energy.

During the 2001 contract with FirstEnergy Solutions, about 14 percent of residents in the NOAC communities opted out of the deal, which saved consumers about $20 annually.

"It was confusing for people.… I'd get calls that ‘my neighbor got the deal and I didn't - how can I get it?’" Ms. Kovacik said.

"Generally, though, the opt-outs were greatly reduced by the second contract."

Mark Durbin, a spokesman for FirstEnergy Solutions, said yesterday it is too soon to know about opt-outs this time. After August 7, Toledo Edison will send out final letters advising residents that they are about to be switched to FirstEnergy Solutions. Once they receive that final letter - which is a new rule by state regulators - residents have seven days to decide if they want to switch. If they do nothing, the switch takes place.

Mr. Durbin said from that point, it will be an additional 30 to 45 days before power will be provided by FirstEnergy Solutions.

However, Toledo Edison will still handle billing and transmission-distribution of electricity.