Aug. 19--DAYTON -- If you are an electricity consumer looking for someone to provide your power at lower rates than your local utility, don't expect to get your wish anytime soon.

Starting in 2001, Ohio began allowing consumers to choose their electricity supplier. State regulators hoped to promote market competition that could give consumers competitive rates and reliable service.

But the relatively low rates charged by Dayton Power and Light Co. and Cinergy Corp.'s Cincinnati Gas and Electric Co. in this region make it difficult for outside suppliers to compete and make money, according to potential customers and the state's consumer advocate.

Outside suppliers have gained more footing in northern Ohio where power rates charged by the established utilities are higher than in central and southern Ohio, the Public Utilities Commission of Ohio says in its latest report on how the electricity choice program has fared. Northern Ohio's rates are higher, in part, because of the region's use of nuclear power generation that has higher capital costs -- ultimately borne by consumers -- than the coal-fired generation used almost exclusively in central and southern Ohio.

"Where there has been room for suppliers to enter the market with reasonable prospects of profitably attracting customers, they have done so. Where utility prices are already low, suppliers have little room to compete," Alan Schriber, the PUCO's chairman, wrote in summarizing the report.

Last year, the Miami Valley Communications Council tried to interest an outside company in supplying electricity to eight Dayton suburbs the council represents. Under Ohio's electric choice plan, the council planned to buy the power as an aggregate of the eight communities and save its consumers about $4 per month, or approximately $50 per year.

But even after resolving a dispute with Dayton Power and Light over how much it would charge to handle billing for the outside company, the council was unable to find a supplier that could undercut DP&L, cover marketing costs and make a profit.

There wasn't an adequate economic incentive for a competitor, said Kent Bristol, executive director of the council which represents Centerville, Germantown, Kettering, Miamisburg, Moraine, Oakwood, Springboro and West Carrollton. If regional power rates go up and Ohio's electricity marketplace becomes more competitive, the council is still interested in seeking an outside supplier, Bristol said.

"We haven't gone out shopping recently," he said. "We have a consultant who tells us when it's a good time to go back into the market. He hasn't said a word for over a year now."

There are no aggregate buyers of electricity in DP&L's service territory. The Cincinnati suburb of Indian Hill, within Cincinnati Gas and Electric's territory, has a two-year contract with outside supplier Dominion Retail to provide power for the village's 5,900 residents.

The contract expires at year's end.

It is possible that Indian Hill may be unable to obtain new competitive bids and may have to revert to CG&E for its electricity supply, village Manager Michael Burns said.

"Electricity in southern Ohio is still a pretty good bargain," Burns said. "The market really hasn't taken off the way the legislature and the Consumers' Counsel thought it would."

Indian Hill's estimate is that the Dominion Retail contract saved its residents about $15 per month, trimming a typical summer monthly bill of $250 to $236 and the winter bill of $123 to $109.

Spokesmen for CG&E and DP&L said their companies are doing all they can to operate efficiently and keep rates stable.

"One would assume that the marketers do not have an easy time meeting our current rates," CG&E spokesman Steve Brash said.

The established utilities have a clear motivation to work to keep rates low enough so that outside suppliers don't get a competitive opportunity, said Robert Burns, a researcher with the National Regulatory Research Institute based at Ohio State University.

"If they get too many entrants in, they start losing customers," Robert Burns said.

The city of Franklin in Warren County, also in CG&E's service territory, has talked with potential outside power suppliers but hasn't received an economically appealing proposal, City Manager James Lukas said.

In addition to Indian Hill, Dominion Retail serves about 15,000 residential consumers in CG&E's territory, said Tom Butler, Dominion's director of retail business development. But the rising costs of fuel used for power generation have pushed up Dominion Retail's cost of obtaining electricity for its Ohio customers 60 percent within the past year and that is too much to pass along to the customers, Butler said.

"That's just outrageous," Butler said. "We don't want to raise people's prices to cover that. So we'll probably send them back to the utility."

Dominion will be ready to renew its competition with the established utilities if the situation becomes more favorable, Butler said.

It could become more favorable as Ohio gradually makes the transition to an electricity supply industry where rates are strictly based on market prices, municipal officials and consumer advocates said. But under current plans, the purely market-driven rates may not come until 2009.

Aggregate buyers have been a success in Ohio's electric-choice program that has otherwise developed slowly and with limited success, the PUCO said in its report to the Ohio General Assembly this month.

Nearly 170 cities, counties and townships have formed government aggregations to buy discounted power in behalf of their residents. The most noteworthy aggregator is the Northeast Ohio Public Energy Council, which represents 112 communities in eight counties and more than 350,000 residential consumers.

Without an aggregator to buy collectively for them, individual residential consumers have little choice other than purchasing energy-conserving appliances or making their homes more energy- efficient, industry observers said.

The Ohio Consumers' Counsel, which represents residential utility customers in the state, says Ohio should proceed to let the electricity-choice program develop. But consumers have few options now, Consumers' Counsel Janine Migden-Ostrander said.

"We remain concerned about the dearth of competition for consumers in central and southern Ohio," she said in a report to state lawmakers at the end of 2004. "There are precious few suppliers making direct offers to consumers anywhere in the state."