An Ohio utility governing board is offering more than 700,000 customers a chance to lock in a set price for electricity over the next seven years in a contract deal considered a first for the industry.
According to the Cleveland Plain Dealer
, the Northeast Ohio Public Energy Council has negotiated a payment plan with FirstEnergy Solutions that would fix the price at 6.75 cents per kilowatt hour.
Council executive director Chuck Keiper said the plan is aimed at giving customers a way to avoid likely power rate hikes in 2015.
Utility companies across the country offer set price rates as a way to help customers even out payments, but none of the plans run longer than two-years.
Although the Ohio deal would set prices a bit higher than most fixed-price agreements, officials said it would balance out over time given the longer contract period.
“If our market call is correct, we think people will get a fair amount of savings for about five plus years,” Keiper told the Plain Dealer. “They will pay a little more in the front end but less in the back end.”
The notices of the contract offer are set to go out to customers later this month.
But the contract plan does have a downside. If customers decide to drop the payment plan later on, they will be charged a $300 cancellation fee.
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