Working on a large industrial audit here in Cincinnati and noticed Cincinnati Gas & Electric has been charging a "System Benefit Charge" of $0.0045 per kWh since 2015. The tariff language is incredibly vague - just says it's for "system reliability improvements and customer programs." No breakdown of how the money is used or any sunset provision. This looks like a slush fund to me. Has anyone successfully challenged similar broad-based charges? Looking at about $85,000 over two years for this client.
Cincinnati G&E "system benefit charge" - anyone challenge this?
Chuck, I'm also in Cincinnati and have wondered about that charge. Duke Energy took over CG&E operations but kept some of the old fee structures. The lack of transparency is concerning. I'd start by requesting detailed accounting records under Ohio's public records law. If they can't justify how the funds are used, you might have grounds for a refund claim. The PUCO doesn't like utilities collecting money without clear purposes.
Similar situation with Kentucky Utilities here in Lexington. They had a "Grid Modernization Surcharge" that was supposed to sunset after five years but they kept extending it. Filed a complaint with the Kentucky PSC arguing that indefinite surcharges become part of base rates and need full rate case treatment. Won partial refunds totaling $120k across multiple clients. The key was proving the utility exceeded the scope of the original authorization.
PNM in New Mexico tried something similar with their "Renewable Energy Act Rider." Started legitimate but scope crept over time to include general system improvements. We challenged based on the original statute language and got $40k in refunds. Document everything about how CG&E describes the charge in different contexts. Often they'll describe it one way to regulators and another way to customers.
Great suggestions everyone. I submitted a public records request to Duke Energy for detailed accounting of System Benefit Charge expenditures. Also found some interesting language in the original 2015 PUCO case that suggests the charge was supposed to be temporary. Mike, your Kentucky case sounds very similar. Do you have the case number handy? Would love to reference the precedent.
Chuck, it was Case No. 2015-00343 at the Kentucky PSC. The key finding was that utilities can't use vague language to justify open-ended charges. The commission ruled that "system improvements" without specific project identification essentially creates an unauthorized rate increase. I can email you the order if you want - it's solid precedent for your Ohio case.
Update on my research - found that the System Benefit Charge was originally approved for specific energy efficiency programs under Ohio's SB221. But looking at recent expenditure reports, Duke is using the funds for general distribution upgrades. That's definitely outside the original scope. Chuck, you might have a stronger case than initially thought. The money is being used for unauthorized purposes.
Cecilia, that's exactly what I needed! The scope creep argument is much stronger than just challenging vague language. I've documented at least six instances where Duke describes System Benefit Charge funds being used for distribution infrastructure that should be recovered through base rates. Filing the formal complaint next week. This could impact thousands of customers beyond just my client.
Chuck, make sure to include a class action component in your filing. The PUCO has authority to order system-wide refunds if they find the charge was improperly applied. Given the dollar amounts involved and number of affected customers, they might be very interested in this case. Keep us posted on the outcome - this could set important precedent for other Ohio utilities.
Following this thread with great interest. PG&E here in California has several similar charges that seem to have expanded beyond their original scope. Chuck's case could provide valuable precedent for challenges in other states. The key principle is that utilities can't use vague tariff language to justify collecting money for unauthorized purposes. Hope the PUCO sees it that way!
Quick update - just saw that the PUCO issued a preliminary ruling in Chuck's favor on the scope creep issue. They're ordering an evidentiary hearing for September. This is huge news for utility bill auditors nationwide. Finally some regulatory pushback against these creative fee structures. Congrats Chuck on a well-crafted complaint!