If Cleveland's electorate votes tomorrow to sell the municipal light system (Muny Light) to the Cleveland Electric & Illuminating Co., it could end the possibility of getting low-cost electric power that the city has been offered.
Sources in the Federal Energy Regulatory Commission have told The Washington Post that a commission administrative law judge is likely to act shortly on a request from Muny Light -- which serves 20 percent of Cleveland -- to force CEI to transmit power from an upstate New York utility willing to sell to Muny Light.
Although the city is in the midst of a serious financial crisis, Mayor Dennis J. Kucinich has staunchly urged the electorate to vote agains the proposed sale of Muny Light, a sale Cleveland's business leaders say is necessary before community financial aid is forthcoming. The issue has become the city's hottest political debate in years.
Muny Light's request on forcing CEI to transmit power dates back to early last year, when Muny Light petitioned FERC to deny CEI's proposed rates for the transmission of power from other sources.
In that case, FERC is considering findings by the Nuclear Regulatory Commission that CEI, which serves the remaining 80 percent of Cleveland, had committed several antitrust violations against Muny Light. Among the alleged violations were the refusal of CEI to allow Muny Light to join a consortium of Ohio power companies in building and using a new nuclear power plant, and a continuing pattern of CEI overcharges to Muny Light for power.
In January 1977, the NRC ordered CEI, as a condition for approving CEI's request for the new nuclear plant, to deliver out-of-state power to Muny Light on fair terms. As of June 1978, the NRC found that CEI was still in violation of that condition.
The FERC source pointed out that if Muny Light is sold, it is likely that the cheaper New York power will never reach Ohio.
"CEI has no reason to buy the cheaper power," the source said. "CEI will always try to sell its own power at the highest cost because it is in their economic interest. The rate structures allow a larger profit on more expensive power."
Utility rates are set by state public utilities commissions, which determine the cost of producing the energy, add a fair profit margin for the utility, and set the rates based on that analysis. Muny Light customers have lower rates than CEI customers because of different rate structures.
If CEI were to purchase cheaper power, the Ohio Public Utilities Commission would have to reevaluate CEI's rates and lower them to reflect the cheaper power.
That action would have a negative effect for CEI stockholders. It would lower the dividends they receive because it would lower CEI's total revenues, which are used to determine the size of the dividend.
A recent article in The Washington Post pointed out another advantage to CEI in buying more expensive power: ties the utility has to the coal companies it buys the more expensive coal from.
And a recent study by consumer advocate Ralph Nader showed that "CEI pays far more for coal than other utilities in Ohio."
According to Nader, Department of Energy data show that last May "cei/ paid an average price of $31.75 per ton for high-sulfur coal. The price for comparable coal paid by other Ohio utilities was Ohio Edison, $27.27; Columbus & Southern Ohio Electric, $23.32; Ohio Power, $22.23; Ohio Valley Electric Co-op, $18.25."
After a FERC administrative law judge's decision, expected shortly, on the Muny Light-New York power case, the matter probably will be appealed to the entire commission.