"Back-to-basics" strategies challenge enterprise-risk philosophies.
Nearly a year ago, cover story announced the rise of the chief risk officer (CRO). "Utility...
The Regulators Forum - States to Feds: Don't tread on Me
respect to other issues that are not appropriate to get into at this point. The second front is that I am a member of the bi-national task force, and everyone will see the resulting study. But as a member I am convinced that the output of that investigation will be the definitive statement. I know the affected states, such as Ohio, already have complied with a number of data requests from that task force. We just have to wait for the results.
F: What are you doing to encourage infrastructure investment?
ARS: We do have rules in place that require meeting minimum standards. To the extent that minimum standards are not being met, we currently are talking to companies, we are seeking agreements to meet on a timely basis standards that perhaps are not met. After that we move to a full-bore, litigated investigation. If we hold a commission-ordered investigation, then the burden falls on commission staff to prove that the company has not met minimum standards. If we can negotiate with the company, we generally arrive at a better outcome, at least from the commission's point of view. Right now we are in fact talking to one or two companies with respect to their service quality, which entirely depends on their infrastructure investment. We are attempting to make sure that they agree to meet certain standards within a certain amount of time.
F: What is the future of electric and gas competition in Ohio?
ARS: For gas there is going to be competition, because there has been for quite awhile, and for our state, major companies have a lot of choice customers. Dominion East Ohio, which is located in northern Ohio-at least half of their customers are getting gas from alternative suppliers. Almost half of Columbia Gas customers use alternate suppliers, so almost half of the state has customers getting alternative sources of natural gas.
For electricity, northern Ohio is doing well with choice, first because electric prices were higher than in the rest of the state, and second they have had an enormous amount of aggregation. There is an organization of about 150 communities in northeast Ohio, which I believe is the largest aggregation of municipal customers in the country. They have about 450,000 customers taking electric from an alternative energy supplier. The city of Cleveland has its own supplier and Toledo is shopping for one. Just by virtue of aggregation of residential customers, electric choice has been very successful in northern Ohio. How successful? Well maybe residential customers are saving $25 a year-not fabulous-but it works.
Central Ohio, serviced by American Electric Power, just has really cheap electricity, and we never anticipated much shopping there in the residential arena. In southern Ohio there is very little shopping inroads because power is cheap there too. Even though there are shopping credits offered that are significant, people just are not biting because the savings just are not that significant. About 20 percent of all commercial and industrial customers in all service territories have been switching suppliers.
F: What is next for