Ratepayer advocates say ‘everyone is unhappy’ with Ohio electric market
“Everyone is unhappy” with the state of the electric industry in Ohio, according to a report issued Tuesday night by the state agency charged with protecting the interests of Ohio electric consumers.
Noting that a majority of states have lower electric rates, the report from the Board of Governors of the Office of the Ohio Consumers’ Counsel calls for the state legislature to form a task force to do a full-scale review of the state’s electric industry and its regulation.
The report states that renewables and energy efficiency save consumers money and notes that states with a more diverse electricity supply mix have lower rates than Ohio. At the same time, however, the report refers to utilities’ concerns about deregulation and the emphasis for energy efficiency leading to a so-called “death spiral.”
“What we’re looking at is to basically get everybody, first of all, to admit there’s a problem,” said Gene Krebs, who chairs the board. “And then let the task force begin to ask about and understand what are the core issues going on and how this should be addressed.”
‘Something is really off here’
The OCC board’s call for a task force is “completely data driven,” said Krebs. “Of all the deregulated states, our rate of increase in cost is by far and away the most.”
The problem is “not renewables,” Krebs noted, pointing out that states such as Iowa have significantly more renewable energy than Ohio. “Yet they’re substantially cheaper than we are” when it comes to residential rates.
“Something is really off here in Ohio,” Krebs stressed. “It’s got to be in our regulatory structure, because the data indicate that all other things being equal, our electricity should be substantially cheaper than what it is.”
The OCC’s call for a task force comes on the heels of FirstEnergy and AEP facing new hurdles in their quests to have electric utility consumers guarantee sales of electricity from unregulated, affiliated power plants. Within the past month, energy giants such as Dynegy and Exelon have offered to undercut the so-called “bailout” deals by billions of dollars.
The OCC report also comes less than six months after FirstEnergy CEO Chuck Jones commented that he would end deregulation of Ohio’s electricity generation market “in a heartbeat.”
Krebs said specific discussion of that idea “never crossed our lips” at the OCC board.
“The board had enough questions about how things are currently structured that we sincerely believe we need to have the task force,” Krebs said. “We’re not anywhere near anything as specific” as re-regulation or anything else in terms of what should be done.
The task force envisioned by the OCC board would include members from the Ohio Senate and House of Representatives, the chair of the Public Utilities Commission of Ohio (PUCO), representatives from the state development agency, state attorney general’s office, agricultural industry, large industrial customers, private and public electric utilities and academia. The Ohio Consumers’ Counsel would also serve on the task force.
