Choice... It's a Good Thing, Right?
Appeared in January 2000 Country Living
Allowing Ohio customers the option to choose electric suppliers was the goal of the electric deregulation bill approved this summer. And being allowed to select who you purchase goods and services from is as American as apple pie and concrete geese.
A recent survey of Ohio consumers found that very few really understood what they would be choosing when deregulation takes effect. So, we thought we would outline a few essential facts so you are ahead of the game.
- Investor-owned (for profit) utility customers must allow other companies to compete for their customers starting Jan. 1, 2001.
- When customers select an electrical supplier, they will only be picking the company that provides electricity. The company that builds and maintains the lines to their home will stay the same.
- Any discounts that electrical energy suppliers claim to offer you will be on the electrical energy portion of the bill. In many cases, the discount will only apply to 50 or 60 percent of the bill.
- Electric Cooperatives have been allowed the choice of "opting in" or "opting out." This means that we can decide to open our territory to allow other electrical energy supplier to sell power to our customers. And, again, we would still maintain our electrical facilities and probably send you your bill. Or we can opt out, which means we can choose to close our territory to other electrical suppliers.
As we have reported to you in a special brochure this summer, Hancock-Wood Electric decided very early that we would not "opt in" until at least Jan. 2, 2002. It was evident early on that it would be a good idea to let the dust settle on the initial scramble for customers and the early changes in PUCO rulemaking.
Recently we attended a two-day workshop on the many issues that must be dealt with if we "opt in." A consultant who had learned many lessons from other states who have already undergone deregulation explained the complexity, the pitfalls and the huge expense involved in gearing up to opt in. He said it takes even very large companies a minimum of two years to prepare for deregulation.
The expenses are extremely high for developing the systems and software to allow customers to switch to other suppliers. While we have not completed any formal analysis, it is obvious that the expense of administering "choice" could significantly increase our costs. These costs would have to be passed along to the customer and could wipe out any savings produced on the energy side of the bill.
Hancock-Wood Electric will continue to study and evaluate the issue. It will be a very difficult decision because we want to do what is best for our members.
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