Ohio businesses could see higher rates, but alternate electricity providers offer some relief

The Public Utilities Commission of Ohio is considering a proposal for a new rate plan from American Electric Power, the state's primary utility company, that could leave many residents unhappy.

The Columbus Dispatch reports that business electricity rates stand to rise dramatically for some small businesses, and switching electricity providers could prove one of the only ways to limit this price spike.

The new plan targets customers such as small manufacturing businesses, and even many churches, that see low electricity usage much of the time with occasional high spikes. This can put strain on the grid and AEP is looking to charge substantially more for such variations, which could lead to as much as 30 percent increases for some of customers.

"It’s going to be hard for us," said Bob Bailey, a retired nuclear engineer who manages energy issues for the church. "Our income is voluntary. People tithe or donate, and all organizations like ours will tell you that giving is down because the economy is tough."

These so-called low "load factor" customers would average increases of as much as 10 percent in the Columbus Southern Power service area and 20 percent for Ohio Power. However, those spikes could be limited to 4 percent for Columbus Southern Power and 17 percent for Ohio Power by including discounts for schools and lower electricity rates offered to first-time customers with alternate electricity providers

This option could prove important, as the PUC reports that only 2.48 percent of Columbus Southern Power customers and 0.4 percent of Ohio Power customers have chosen to switch electricity providers. Rates for industrial and commercial customers are somewhat higher, but remain low. Columbus Southern Power has seen 18.4 percent of industrial customers switch, along with 15.37 percent of commercial customers, while Ohio Power has seen a change from only 1.93 percent of industrial customers and 2.14 percent of commercial customers.

Though these areas have some restrictions, some small businesses might be able to save money in this manner if the new plan is approved.

Approval is not guaranteed as opposition could grow with the revelation that AEP intends to charge so much more for many small businesses. The Dispatch notes that business electricity has largely served to subsidize residential electricity usage, making business owners frustrated to see their own rates rising.