Toledo, Ohio Grants Short Term Franchise, Studies Local Options

Under pressure from community referenda since 1989, the Toledo City Council is investigating municipalization and other options to escape Toledo Edison's (TE) high electric rates. The city created a $100,000 budget and hired consultants to study the option of establishing a municipal utility to compete with the investor-owned utility. The city signed a short-term five year interim franchise agreement with TE, approved by voters in 1993.

The city attempted unsuccessfully to negotiate for rate relief, and following another community-led referendum created a $400,000 budget to study a wider array of options.

A final report is expected in March, 1997, and the committee will make recommendations to the city council early in Summer. The report will estimate the cost and savings to be expected from a variety of strategies, including full municipalization, load aggregation, and creation of a Special Improvement District and a California Irrigation District-style wholesale operation through acquisition of a substation. The Special Improvement District model would entail operating as a municipal utility in a business subsection of the city, and is focused on bringing low cost power to businesses. Under the Irrigation District model, the city would acquire a substation for wheeling power to businesses and perhaps also residents.

Ohio has strong Home Rule powers, giving cities and towns constitutional authority to municipalize locally under home rule. The legislature is not authorized to restrict municipal aggregation as in California, nor to pass stranded costs onto municipal utilities.