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Ohio Bill Could Introduce Full Electric Deregulation

June 6, 2017

Last week, Rep. Mark Romanchuk (R) introduced legislation (House Bill 247) that would give Ohio full electric deregulation. The legislation would force utilities to base customer rates on wholesale power market prices, and, in the process, replace Ohio’s current electric power regime. Since 2008, Ohio has been run by the Energy Security Plan (ESP), which often leads to lengthy debates on utility investments and bill riders. Ohio is part of the PJM electric market, but its regulated utilities can still own power plants. As such, Ohio is really only partly deregulated.

In order to support these power plants, utilities often seek riders and other customer charges. In addition, they turn to the Public Utilities Commission of Ohio to secure direct financial support when power plants are uncompetitive. For example, FirstEnergy, an Ohio utility, wants to pass legislation that would provide a subsidy to two nuclear power plants. In addition, another bill that would provide perpetual subsidiaries for two plants run by the Ohio Valley Electric Corp (OVEC) was passed two weeks ago. OVEC is owned by a group of Ohio utilities.

The bill, however, would attempt to end debates on utility investments and bill riders that are part of the ESP. In doing so, it would lead to a reduction in electric supply cost for consumers. Bill riders have been particularly taxing on consumers. The bill has the support of a collation of consumer groups that includes: AARP Ohio, the Ohio Consumers’ Council, the Northeast Ohio Public Energy Council, the Ohio Farm Bureau, and the Ohio Manufacturers’ Association. The reactions of generators and utilities, on the contrary, are mixed. For example, Dynegy favors the deregulated model, but AEP wants to push for re-regulation. The bill has not been assigned to a committee, but consumers, generators, and utilities will want to keep track the trajectory of the bill.