Dayton Power & Light reaches settlement for distribution rider in Ohio

Dive Brief:

In a filing with the Public Utilities Commission of Ohio (PUCO), Dayton Power and Light is seeking approval for a revised version of its distribution rider.
DP&L says its amended stipulation has the support of 13 parties and PUCO staff, as well as from residential, commercial, industrial and low-income customers.
The new stipulation includes a three-year distribution rider set at $105 million annually with an option for PUCO to extend the rider for an additional two years.

Dive Insight:

DP&L's settlement for its distribution rider comes after a series of debates in the state on special payments to utilities to stabilize revenues or prop up at-risk generation.

Last year, the Ohio Supreme Court twice struck down utility requests to increase customer charges designed to help shore up utility revenues as the state transitions to a competitive electricity market.

The court ruled against riders that would have increased costs for customers of both DP&L and American Electric Power.

Those decisions regarded utility proposals dating back to 2012, but utilities have continued to seek stabilization riders. Last year, PUCO regulators approved a $204 million annual distribution rider for FirstEnergy to ensure the company would be "healthy enough" to make grid investments.

Approval of the rider came after federal regulators blocked income supports for a group of coal and nuclear plants owned by FirstEnergy and AEP.

AEP elected to sell some of the plants and is now gearing up for a legislative push to re-regulate the Ohio electricity markets.

In its latest filing, DP&L says the average residential customer, using 1,000 kWh on DP&L's standard service offer, could expect a monthly bill decrease of about $0.25 due to the distribution rider.

PUCO has granted DP&L an extension of the hearing date to April 3. PUCO is expected to render a final decision by mid-year.

“The proposed settlement represents a compromise among the parties, while allowing DP&L an opportunity to achieve an investment grade credit rating,” Tom Raga, DP&L president and CEO, said in a statement.