Customer choice is coming

For years you have flipped the switch, the lights came on, you paid the bill and everyone was happy. (Well, almost everyone.)

Actually, customers in some parts of the state were not so happy because they were held captive to extraordinarily high rates caused by huge investments in nuclear power plants. These customers and their legislators have helped bring changes that will allow them to select the company that generates their electricity. This is called "customer choice" and means that customers of investor-owned utilities will soon be able to choose the company that generates their electricity separate from the company that delivers their electricity.

Deregulation first occurred March 1, 1998 in California. Ohio has gone slower on deregulation for several reasons. One major reason is that high rates have not been the norm throughout all of Ohio. More than half of the state's total electric accounts receive service at rates significantly below the regional average.

Nevertheless, the deregulation legislation that became law in Ohio July 6, 1999 states that customer choice will begin for customers of all investor-owned utilities Jan. 1, 2001. In the legislation, electric cooperatives and municipal utilities were treated apart from investor-owned utilities because they are are owned by their customers, who have a direct say in how the utilities are run. Because electric cooperatives were treated differently from investor-owned utilities, it means they will have a choice whether or not to "opt in" to customer choice when it begins Jan. 1, 2001.

While it is likely many or most electric cooperatives in Ohio may eventually opt in to participate in customer choice, they may not opt in immediately on Jan 1, 2001. The reason is twofold: Ohio's cooperative customers now enjoy power costs at or below the state average and would probably gain no benefit. Also, a newly deregulated market can be chaotic.

By taking their time to prepare for deregulation and choice, electric cooperatives will be able to carefully plan for any impact opting in would have on the organization or their customers.

Even if a cooperative opts in and a customer selects another company to provide his or her generation, the customer will continue to receive transmission and distribution services from their existing cooperative at rates set by their local directors.