By JOHN McCARTHY Associated Press Writer
Published on Thursday Aug 30, 2007
Gov. Ted Strickland looked both ways before rolling out his new energy plan: backward and forward.
Strickland
wants to return control of electric rates to state regulators. The
forward peek in his plan seeks the development of new sources of energy
_ clean coal, new nuclear power technologies, wind, water and the sun.
He wants 25 percent of the power produced in Ohio to come from such
sources.
The goal is to bring stability and predictability
to Ohio's electric power industry. That in turn will attract new jobs
and keep existing ones here, Strickland said.
"Other states are in fact outperforming us," Strickland said in announcing the plan Wedneseday. "Our status-quo days are over."
Ohio
lawmakers passed an electric deregulation law in 1999 aimed at allowing
competition between suppliers and lowering customers' bills. The law
required a transition period with frozen distribution rates for big
utilities and a 5 percent discount on generation to allow the market to
develop.
However, competition never developed because no one has been able to beat what utilities now pay for power.
The Public Utilities Commission of Ohio has continued to regulate the distribution and transmission of electricity to customers.
But
rate stabilization plans are set to expire at the end of 2008 for
Akron-based FirstEnergy Corp., Columbus-based American Electric Power
Co. and Duke Energy Corp., which supplies power in southwest Ohio.
Dayton Power & Light Co.'s plan expires in January 2010.
Strickland
said the state must step in again to prevent price spikes once the
stabilization period ends. He noted Illinois, where rates increased up
to 50 percent once competition became a reality, and Maryland, where
rates shot up 72 percent. Strickland said it's too early to determine
what the impact would be on residential rates in Ohio.
"We
cannot let happen (in Ohio) what happened in Maryland and what happened
in Illinois," Strickland said at a briefing for reporters.
PUCO
would sign off on any plans by electric utilities to change rates in
Ohio. The panel also has the power to approve a utility's decision to
bring competition to the sale of power.
Many groups have
offered solutions to the problem, including those of industrial and
commercial users that wanted a return to strict regulation by the state.
FirstEnergy,
which provides power to more than 2 million customers in northern Ohio,
agrees that keeping jobs in Ohio is important but has concerns about
cost, especially the plans to produce clean coal and add more nuclear
power, spokeswoman Ellen Raines said. She said the technologies for
those energy sources are in their infancy.
"We don't know how that squares with rate stability. All of those items have significant price tags," Raines said.
Erin
Bowser, executive director or Environment Ohio, a nonprofit advocacy
group, said her group would have liked to have more of an emphasis on
"clean" renewable energy, such as wind and solar power.
"Because
we have lumped coal and nuclear power into this plan, we are continuing
to not give the lift we need to renewables to develop," she said.
Some
of Strickland's ideas would save customers money, said Ohio Consumers'
Counsel Janine Migden-Ostrander, whose office represents residential
customers in rate cases. However, she has concerns about some of the
ways utilities could increase rates by passing on the cost of new
plants and pollution control equipment.
Strickland would
like legislation on his plan completed by year's end. If the plan
clears the Republican-controlled state Legislature, the Public
Utilities Commission of Ohio would have to find a way to implement it.
"It is my hope that we would deal with this expeditiously," Strickland said.
Republican leaders in the Legislature were noncommittal in their response to Strickland's plan.
"We
appreciate the work the governor and his staff have put into organizing
their thoughts on energy policy," House Speaker Jon Husted of Kettering
and Senate President Bill Harris of Ashland said in a statement. "We
look forward to receiving the proposal in bill form and evaluating its
ramifications."
While much work remains, Strickland took an
important first step on Wednesday, said Sam Randazzo, a lawyer who
lobbies for Industrial Energy Users-Ohio, the utilities' biggest
customers.
"Ohio needs to deal with the mismatch between
expectations that existed and what we are actually contending with
today," Randazzo said. "The one thing that's positive is the governor
has identified this issue as important for the state. ... Shame on us
if we can't get it done from here."
