Broker Warns "Huge Increase" in Electric Rates Looming for Small Businesses (Capacity Charge)

The Council of Smaller Enterprises (COSE), a Northeast-Ohio small business association, warned small businesses about, "alarming increases projected in electricity cost."

The Council of Smaller Enterprises operates an affinity program offering members and non-members competitive supply electricity offers. The program is managed by OnDemand Energy

"Small businesses are expected to see a minimum increase of 35 percent in their electric bills over the next three years due to an unprecedented 'capacity pricing' surge," COSE said.

As an example, COSE said that in 2013 the average Cleveland Electric Illuminating customer paid about 0.28 cents per kilowatt-hour in capacity costs. This summer, that same customer will pay 1.26 cents per kilowatt-hour and up to 2.94 cents per kilowatt-hour in 2015.

"If the average commercial business takes no action to protect against the price hikes, they could see an increase from $227 in 2013 to $1,058 in 2014, peaking at $2,470 in 2015. In just two years, that consumer will pay over $3,000 more in capacity charges," COSE said.

Although COSE said that capacity price increase is "unavoidable," COSE said that locking into a three-year deal would help mitigate the impact.