Duke Energy Ohio proposes long-term electric security plan

Cincinnati, June 20, 2011 Duke Energy Ohio today asked regulators for approval of an electric security plan for its customers beginning Jan. 1, 2012. Under the proposal, rates would be in effect through May 31, 2021.

Under the proposed ESP, generation remains unbundled and separate from transmission and distribution service. The plan further unbundles generation service by separating capacity (physical assets) from energy (the actual output).

Customers would pay for capacity through a non-bypassable, cost-of-service-based charge, while energy would be priced and purchased through a competitive auction.

In other words, the plan is structured to include a market-based or competitive element, while also affording customers with the stable prices and reliable supply, on which they can depend.

The plan also provides for a unique mechanism in which net profits from the sale of energy and ancillary services from the dedicated Duke Energy Ohio power plants would be shared between customers and the company, 80 percent and 20 percent, respectively.

If approved by regulators, Duke Energy Ohio residential customers who use about 1,000 kWh a month will see their bill increase about 3 percent, or roughly $4 per month, beginning Jan. 1, 2012.

Duke Energy Ohio's operations provide electric service to about 685,000 customers and natural gas service to about 400,000 customers.

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