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November 01, 2003

 



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Editorials | Article published Saturday, November 1, 2003
Watchdog or lapdog?

As Consumers’ Counsel of Ohio, Robert Tongren usually is referred to as a "watchdog" for the public on electric rates and other utility matters.

Now, in a case involving FirstEnergy, parent to Toledo Edison, and the controversial 2001 electric deregulation deal, there are accusations that Mr. Tongren is less the diligent sentry on behalf of consumers he pretends to be and more of a lapdog, who consorts cozily with lobbyists for the utilities.

The resulting flap triggered hearings by the Senate Public Utilities Committee and an investigation by the state Inspector General to determine if any laws were broken.

The inquiry is well justified. It could shed some light on the necessity for the Office of Consumers’ Counsel, which has 74 employees and will cost the state $9.3 million this year. Should taxpayers be subsidizing an expensive watchdog - Mr. Tongren is paid more than $130,000 a year - who isn’t genuinely looking out for their best interests?

For his part, Mr. Tongren says he has saved utility consumers $1.7 billion during his tenure and has no intention of quitting, as some consumer advocates have suggested.

At issue is a three-year-old report by a Boston consulting firm, which is said to have determined that FirstEnergy was due less than half of the $8.7 billion in so-called "stranded costs" it was awarded by the Public Utilities Commission of Ohio to recoup its investments, chiefly in the cash-draining Davis-Besse nuclear power plant.

Mr. Tongren never made the report public. He said the document, which cost the state nearly $580,000, was thrown out in the trash in August, although a copy finally was located last week.

Meanwhile, a second report, prepared by a Colorado firm, has been released by the PUCO. That consultant also recommended that FirstEnergy be allowed to charge its customers about $4 billion in stranded costs.

But when the deregulation deal came down from the PUCO, the advice of both consultants was ignored. FirstEnergy got most of the $12 billion it originally wanted, in exchange for reducing rates by 5 percent and a rate freeze through the end of 2005.

Mr. Tongren’s position is that he went along with the $8.7 billion settlement because he knew he would be overwhelmed by FirstEnergy’s legal resources. That’s a toothless excuse. Isn’t a watchdog supposed to at least snap and snarl?

With electric rates due to be deregulated in 2006, the likelihood is that consumers will be in for sharply higher bills. If ever there were a need for a pit bull on behalf of residential ratepayers, this is the time.

In what looks like a pre-emptive strike, FirstEnergy has filed a request with the PUCO that essentially would allow it to continue charging the equivalent of its stranded costs in exchange for continuing the rate freeze. The company cleverly calls its proposal a "rate stabilization charge."

So, instead of lower rates as promised by proponents of deregulation, the choice for home customers could be charges that remain high - or maybe go even higher.

Deals like that - which still must get by the PUCO - raise the question of whether Ohioans even need a consumer watchdog, especially one on so short a leash.



More articles on this subject »
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No bailout for Boeing 10/31/2003

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