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As reported previously on May 19, 2026 a PUCO Staff Report of Investigation was filed in the Dayton Power and Light Company d/b/a AES Ohio rate case.   The Staff Report was jointly prepared by the Staff’s Rates and Analysis Department and Service Monitoring and Enforcement Department.

In addition to basic rate case issues such as rate base, rate of return, rates, the staff report made recommendations related to customer programs including, residential demand response and commercial and industrial demand response programs.  The staff report also evaluated service monitoring and enforcement matters including the recent implementation of a new customer information systems (CIS) and related performance issues.

Below is a reminder of some of AES Ohio proposals and Staff’s findings/recommendations on key topics including:

Residential Demand Response Program

AES Ohio proposes a Residential Demand Response Program that would allow AES Ohio to actively manage residential customer owned devices beyond the utility’s meter, namely smart thermostats. To incentive residential customers to allow AES Ohio’s control, AES Ohio proposes to add $10.00M to the amount it collects in rates over the next three years, while only providing $3.37M of that amount back to a smaller subset of residential customers that sign up for the nonresidential “energy intensive” customers. AES Ohio defines “energy intensive” as a “self-assessing” customer, which under R.C. 5727.81 is a customer that uses at least 16 45 million kWh per year. Participating customers would receive a credit of $3.50 per kW of “curtailable capacity” and would also receive a credit of $0.10 per kWh for energy saved during any called events. The approximately $6.63M of remaining cost of the program is profit for AES Ohio, profit for the third-party administrator AES Ohio hires to run the program, and costs to operate the program (including outreach, education, and evaluation). The proposal includes a one-time rebate between $50and $100 for the purchase of a demand response-capable device, such as a smart thermostat, and participation incentives of up to $20 per demand response season ($5/month for the months of June through September).

Staff recommends conditional approval of the Residential Demand Response  Program (“Residential DR”) with two modifications: (1) the Company should not be permitted to recover the 12% financial incentives regardless of whether the program has been deemed cost effective, noting that the Company should not need a financial incentive to offer programs that promote affordability and reliability 20 for which it will receive full cost recovery of actual prudently incurred expenses; and (2) Staff recommends spending caps less the financial incentives of $2,552,000 in 2027, $2,964,720 in 2028, and $3,419,635 in 2029, or $8.94M.

Commercial and Industrial Interruptible Demand Response Program (C&I IDR Program)

AES Ohio proposes a nonresidential Interruptible Demand Response (IDR) Program that would be available to up to 50 MW of participation by nonresidential “energy intensive” customers. AES Ohio defines “energy intensive” as a “self-assessing” customer, which under R.C. 5727.81 is a customer that uses at least 45 million kWh per year. Participating customers would receive a credit of $3.50 per kW of “curtailable capacity” and would also receive a credit of $0.10 per kWh for energy saved during any called events. Events can be called both for reliability and for economic purposes.

Staff report and recommendation finds that AES Ohio has not demonstrated that the program meets the requirements of R.C. 4909.192(A), which requires the utility to show that the program would enhance distribution reliability, enhance transmission reliability, and promote economic development.  Staff said that it would be improper to charge ratepayers for such a program without a clearly defined implementation plan and a thorough analysis demonstrating the reliability and economic development benefits expected from the program.

Customer Information System (CIS)

AES Ohio’s Customer Information System (“CIS”) called AES Customer Ecosystem (“ACE”) is an online platform for customer transactions. AES Ohio recently implemented sweeping changes to its CIS impacting among other things, billing related issues for competitive retail electric suppliers, other market participants and their customers.

In response to this Staff Report several parties filed comments on the utility’s proposed customer programs as well as implementation shortcoming of the CIS implementation roll out. An overview of comments filed on these latter issues is also provided below:

Ohio Energy Leadership Council in direct testimony of Matthew Brakey recommends that “an approved interruptible program in AES Ohio’s service territory should be modeled after the precedential programs already established in the state, specifically FirstEnergy’s Rider ELR and Ohio Power’s IRP-E.”

Ohio Manufacturers’ Association Energy Group – Direct in testimony of John A. Seryak filed on behalf of OMAEG summarizes its conclusions and recommendations:

“I am testifying that the Staff Report’s proposed data center tariff:

• Is not supported by sufficient data or analysis;
• Insufficiently protects customers;
• Could exacerbate load forecasting inaccuracy, thereby creating new costs for customers;
• Is misaligned with the Ratepayer Protection principles established by the President’s Energy Dominance Council and a bipartisan group of Governors; and
• Is misaligned with current and forthcoming Federal Energy Regulatory 5 Commission (FERC) orders.”

Office of the Ohio Consumers’ Counsel (OCC) – In direct testimony of Joseph Buckley on behalf of OCC recommends the following:

“The PUCO should require that AES Ohio demonstrate that capital investments produce measurable efficiency and reliability improvements before allowing full recovery. The consequences for not meeting efficiency gains and reliability improvements need to be meaningful. I recommend that the PUCO should therefore modify the TYRP to include enforceable accountability measures, such as the performance incentive mechanisms recommended by OCC’s witnesses. I also recommend that the PUCO adopt my recommendations for the tariff language and for transfer of the OVEC plants.”

IGS and RESA  – Matthew White on behalf of IGS and RESA states in direct testimony recommends:

“The purpose of my testimony is to support the Objections to the Staff Report of  Investigation filed by IGS Energy and Retail Energy Supply Association (“RESA”)  on June 18, 2026. . . .  I concur with Staff’s assessment that AES Ohio’s ACE rollout was seriously flawed and negatively impacts both customers and suppliers and therefore recommend the Commission approve a return on equity at the low end of Staff’s range.”

Residential Demand Response Program?

“The program is neither lawful nor reasonable. . . . In my view the General Assembly has sent a clear message that EDUs should focus on their regulated wires activities; residential active demand management programs are the domain of the competitive market and its participants. Commission precedent also does not support AES Ohio’s proposal given that the Commission has previously rejected these utility proposed programs after the conclusion of the EE/PDR mandates. While Staff’s recommendations to eliminate AES Ohio’s proposed profit bonus payment and to cap overall costs are encouraging, those recommendations re nevertheless insufficient to render the proposed program lawful and reasonable.”

“Because the proposal is contrary to Ohio law and Commission precedent, I recommend that the Commission reject AES Ohio’s proposed Residential Demand Response Program.”

Commercial and Industrial Interruptible Demand Response Program (C&I IDR Program)

“My recommendation applies if the Commission reverses the Staff Report recommendation and approves the C&I IDR Program. It appears from its application that AES Ohio is proposing to operate as a curtailment service provider (“CSP”). However, operating as the CSP raises significant competitive concerns. Initially, any of the customers eligible for the program with existing capabilities may already be relying on a CSP that already operates in the competitive marketplace. It follows then that a monopoly utility offering the same or similar service at a credit rate that is equal to or greater than what is available from PJM would send a signal that disincentives CSP participation, distorting competitive market conditions. There is also no need for AES Ohio to operate as the CSP via a commercial demand response program offering.”

Customer Information System (CIS)

“Since the CIS conversion, IGS and its customers have been adversely impacted by a variety of issues (i.e., inaccurate customer billing information, missing or incomplete historical usage information, accounts active without usage, dropping customers back to Standard Service, etc.). Although IGS has likely dedicated thousands of employee hours across its IT, Operations, and Billing departments thus far to update its systems and to address issues associated with the conversion, many supplier-related issues remain unresolved. IGS has spent numerous hours contacting AES Ohio, often times going without response. While some issues were resolved there are still outstanding items as of this filing.”