The rate hikes are part of what parent firm American Electric Power calls a "stabilization plan" prompted by electric deregulation 5 years ago. But electric competition has been slow to develop in some service areas.
"I'm not aware of any competitors currently," says AEP spokesman Doug Flowers, speaking of the electric market in the area. With little or no competition, Ohio Consumers Counsel Janine Migden-Ostrander contends the rate hikes are illegal, prompting the consumer watchdog to challenge the plans in court.
"The fact that the competitive market hasn't materialized has really been a disappointment, and we need to take a good close look at why and what changes need to be made," Migden-Ostrander says.
Migden-Ostrander also questions whether the rate increases should be allowed before the case is decided.
"I'm not sure that giving the utility companies these increases without an adequate review as to the reasonableness of these costs, or whether these costs are appropriate in a competitive market, is the right answer."
But Flowers says electric market development is still a possibility, and utilities are within their legal rights to keep rates stable given possible changes in the market.
"Customers will still have an option to shop and switch to a competitive supplier to avoid the increases, and again, that is based upon providing those customers with an opportunity for choice should that choice would develop and become available to them."
The electric rate case is pending before the Ohio Supreme Court.