Background:

• Public hearing in Shaker Heights on March 13 is one of a series being held throughout FirstEnergy (FE) territory.
• First Energy filed an Application for a rate increase on June 7, 2007.
• Many parties have intervened in the rate case, including the Ohio Office of Consumers’ Counsel and various representatives of low income customers, industrial customers and electricity providers.
• The PUCO has been holding hearings among the parties and may also take the views of the public into consideration in making its decision on the rate case.

History:

• CEI’s current rates were established in 1996.
• Although the Ohio General Assembly enacted legislation in 1999 to allow for competition in the provision of electricity, similar to the way competition for providing natural gas and telephone service has emerged, very little of such competition exists today for electricity.
• The Ohio General Assembly and Governor Strickland are currently working on legislation to try to deal with the lack of competition in the electricity market, by potentially re-regulating electric service.
• CEI has applied for a rate increase assuming that there will not be a total deregulation of its rates by the end of this year, as previously planned.

Rate Increase Request:

• FE proposed a $340 million annual revenue increase, while the PUCO recommended an increase of between $162 million and $181 million.
• The Office of Consumers’ Counsel (OCC), which represents the interests of residential utility consumers, says that the proposed distribution rate increase for FE’s residential customers is unreasonable.
• According to the OCC’s experts, distribution rates should go down, not up, for CEI customers.
• Among the issues being considered in the rate case is CEI’s reliability in providing electricity to its customers.