As the residential utility consumer advocate, the OCC has concerns about the proposed legislation. The OCC believes important changes are needed to ensure Ohio’s more than 4 million residential electricity customers are protected and are provided with the lowest cost energy options, a fair and open rate setting process and more opportunities for renewable and energy efficiency technology.

First and foremost, the legislation should protect consumers through a side-by-side review and comparison of rates under an electric security plan and the market rate option to provide electricity. Unless Senate Bill 221 incorporates the flexibility to provide the lowest cost electricity to each utility’s customers, residents in some parts of Ohio will win while others will lose.

Second, the proposed electric security plan would provide utilities the ability to impose automatic increases that could cost consumers billions of dollars in areas such as environmental compliance, fuel and investments in generation. This would be permitted without the opportunity to see if there are decreases in costs in other areas to offset these increases. It is unclear whether appropriate processes would be used to allow the OCC as well as commercial and industrial customers to challenge any charges that may not be just and reasonable. 

The OCC is also concerned that based on the current language,  regulatory transition charges that consumers have paid in full to the utilities would continue on customers’ bills indefinitely, costing many consumers throughout Ohio hundreds of dollars per year. For example, a typical residential customer in the Toledo Edison service territory could continue to pay in the range of approximately $240-$340 per year for these charges.

Areas of SB 221 that address renewable energy and energy efficiency need to be strengthened, according to the OCC. Diversity in the types of resources Ohio uses to produce electricity has tremendous potential. Renewable energy can help stabilize prices over the long term, create jobs and improve the environment. Some of these resources are competitive with and less costly than advanced technologies such as nuclear and clean coal.

Energy efficiency technology is available and needs to be a part of the solution to help consumers lower their bills and it is far less expensive to lower the use of electricity than any other supply option. This is Ohio’s best opportunity to manage and deflect rising costs and keep service affordable.

Based on SB 221 electric utilities would be required to provide 25 percent of their power by 2025 using advanced energy resources. At least half of that – 12.5 percent – would come from renewable energy resources such as wind, solar and biomass, while the other half could come from other advanced energy resources such as clean coal and nuclear. However, one of the problems is that there are no benchmarks or penalties to ensure that utilities will make consistent progress. It is important to establish a strong commitment to renewable energy and hold utilities responsible for meeting this commitment by including annual benchmarks and penalties for noncompliance.

Another drawback is a provision of SB 221 that could eliminate any new investment in renewable energy by the utilities. The provision would allow state regulators to weaken a utility’s need to comply with the standard if advanced energy projects would increase rates by 3 percent or more by 2025. This could mean that a utility constructing an expensive clean coal or nuclear plant might be exempt from providing any power using wind, solar or biomass. 

Consumers’ Counsel Janine Migden-Ostrander provided testimony and proposed amendments in the Ohio Senate on behalf of our state’s more than four million residential electric households. The OCC’s recommendations would have ensured that customers obtain the lowest electric costs through a fair and open process. However, the legislation was passed by the Senate without addressing many of the OCC’s concerns.

The proposed legislation is now being considered by the Ohio House of Representatives. The OCC is working with this group of legislators, and is encouraging individual residential consumers to also become involved in this important legislation that affects each household budget.

The OCC believes the following are among the most important changes to SB 221 needed to give consumers protections and safeguards well into the future.

1) Protect consumers by providing the lowest-cost electricity generation option, either an electric security plan or a market price.
The comparison should be done in each utility’s service territory since utilities’ rates can vary significantly. This will help ensure that the lowest rates are paid by residents in each part of the state, as one solution will not work for all Ohioans.

2) Allow for due process and ensure all costs under an electric security plan are justified by a utility before it is allowed to increase customers’ rates.  
The proposed legislation needs to include a process to ensure that any rate increase proposed by the utility is investigated fully in a regulatory proceeding and is fair to consumers. There should be audits of these costs to verify that they are accurate, reasonable and prudent.

3) Enhance the use of energy efficiency and renewable energy in Ohio.
Beyond the need for benchmarks and penalties to be added to the standards in SB 221, the OCC believes the requirements should be increased.  

The renewable energy standard should be increased from 12.5 percent in the proposed legislation to 20 percent by the year 2025.

Regarding the energy efficiency standard, SB 221 would produce approximately 0.3 percent average annual reductions in energy usage. The OCC recommends adopting a more aggressive approach modeled after a new law in Illinois.

Contact your state representative immediately and let them know the importance of these consumer protections and safeguards. A personalized telephone call or letter is preferable. If you do not have time to make this personal contact, you may use the OCC’s sample letter to send to your representative.

To find out which representative represents your area and his or her telephone number, call 1-800-282-0253 or click here to find out.

You can mail a letter to your state representative’s attention by using this address:

The Honorable [fill in the name of your representative]
77 South High Street                                                                                     
Columbus, OH 43215-6111