The results of a wholesale electricity auction held Wednesday will mean substantially lower rates for FirstEnergy customers, beginning June first. Ideastream’s Bill Rice reports.
Auctions for utilities like natural gas and electricity are behind-the scenes, somewhat complicated proceedings that are part of state process to make those markets competitive, and rates market driven.
The auction was triggered by a difference between a new higher rate that FirstEnergy wanted to charge and the rate proposed by the Public Utilities Commission of Ohio.
Nine bids were accepted to provide chunks of power to FirstEnergy companies like The Cleveland Electric Illuminating Company and Ohio Edison.
Lippe: “And what we see in FirstEnergy territory as a result of the auction is going to be lower prices than what customers are currently paying, and much lower prices verses what FirstEnergy had originally proposed in 2008 when they came out with a proposed electric security plan. So what we see is the market working, especially at the wholesale level.”
Cleveland Electric Illuminating customers will see rates drops of less than half of what Ohio Edison customers in the Akron area will see. That’s because while they are both FirstEnergy operating companies, they have different rate structures and associated charges.
Bill rice, 90.3.