Apr. 11—A new settlement between retailers, the city of Dayton and staff for state regulators could result in lower average residential electric rates if a state commission approves the pact, at least initially, according to a spokeswoman for Dayton-area electric utility AES Ohio.

"If the settlement is approved as proposed, the initial impact for AES Ohio's average residential customer using 1,000 kilowatt hours per month would see a decrease of $1.37 per month," AES Ohio spokeswoman Mary Ann Kabel said Tuesday when asked about the impact the plan will have on customer rates.

However, in year two of the proposed electric security plan, rates would go up 31 cents a month for a resident using 1,000 kilowatt hours a month, and in year three, rates would rise $2.19 a month, at the current market rates, Kabel said.

Electric rates are determined by state regulators and ever-shifting market conditions, so those numbers can be expected to change. For example, after last week's wholesale electricity auction, AES Ohio's average residential customer using 1,000 kilowatt hours per month could see a decrease in their bills of $2.26, Kabel said at that time.

A "stipulation and recommendation" was filed on the web site of the Public Utilities Commission of Ohio (PUCO) late Monday.

The filing was signed by representatives of Kroger, PUCO staff, the University of Dayton, the city of Dayton, the Ohio Manufacturers Association Energy Group, an association representing Ohio hospitals and others.

The settlement requires AES Ohio to contribute $150,000 of shareholder funds to its "Gift of Power" program over the three-year term of the plan, the utility said. The program provides emergency relief funding to eligible customers facing disconnection or financial hardship.

"This comprehensive settlement is a major step in our ability to execute on our strategic plan to strengthen our network, ensuring that critical investments are made to benefit customers today and, in the future," Kristina Lund, AES Ohio president and chief executive, said in a statement. "For more than 100 years, our customers have relied upon us for affordable and reliable service, and we have and will continue to provide transmission and distribution service with the lowest rates of Ohio investor-owned utilities."

Members of the PUCO — a commission of five appointed members who oversee Ohio utility services ― have not voted on the settlement. A PUCO spokesman said an evidentiary hearing on the plan is set for May 2.

At least one observer is skeptical, however.

"With inflation and the aftermath of high energy prices, this is not the time for higher electric charges to consumers," the Office of the Ohio Consumers' Counsel said in an email to the Dayton Daily News. "The Consumers' Counsel, to protect consumers, opposes the settlement and will ask the PUCO Commissioners to reject it."

The office added: "The settlement's rate increase, if approved by the PUCO, will be a double-whammy for AES's consumers because last year's $75 million rate increase will also take effect. The settlement's rate increase includes controversial coal plant charges making consumers pay corporate welfare to AES. These subsidies for AES relate to two coal plants (one in Indiana) that are partly owned by AES. Utility lobbying later led to subsidy charges related to those coal plants being included in tainted House Bill 6."

Representatives of the PUCO and the counsel's office were reviewing the settlement Tuesday and could not say immediately how rates would be affected.

AES Ohio, the former Dayton Power & Light, applied last September to the PUCO for a new "electric security plan" or "ESP." An ESP is an operating plan that sets prices for the generation of electricity, and it may cover investments in distribution and grid modernization.

If the PUCO had approved it as originally filed, the plan would have imposed new costs initially of less than $1 per month, on a residential customer using 750 kilowatt hours (kWh) a month — before rising to $4 a month in new costs.

If approved, the plan would last three years, from July 1, 2023 through June 30, 2026.

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What to know

AES Ohio's average residential customer using 1,000 kilowatt hours per month would see a decrease of $1.37. The average Ohio residential customer uses about 892 kWh a month.

Source: AES Ohio; U.S. Energy Information Administration.