By Mark Niquette and Paul Wilson
In an effort to prevent electricity rates from skyrocketing, Gov. Ted Strickland proposed a new
state energy plan yesterday that also calls for more use of wind, solar and other alternative
energy sources.
The governor couldn't predict whether electricity rates for consumers and businesses would go up
or down under his plan. But with most utility rate plans set to expire at the end of next year --
and with prices spiking in other states -- Strickland said his plan would stabilize rates, and that
doing nothing would be disastrous for Ohio.
"Simply to stay where we are is totally unacceptable," he said.
Representatives of utilities, manufacturers, consumers and environmental groups said they were
encouraged by Strickland's approach, or at least part of it, even as they and legislative leaders
look for more details. Strickland's office continues to work with the Legislative Services
Commission on the bill.
The roots of the debate date to the 1990s. Ohio joined many other states in deregulating its
electricity market in 2001.
In a deregulated market, customers can buy electricity from independent power providers instead
of only the utilities whose wires are connected to their homes. The hope was that competition would
emerge, lowering electricity prices.
But that didn't materialize. Many reasons have been given, ranging from poor decisions by
federal regulators to badly constructed regulations and the existence of already-cheap power in
southern Ohio.
The governor proposes giving utilities the choice of returning to a regulated environment by
having the Public Utilities Commission of Ohio approve their rates or opting for market pricing --
but only if they can prove to the PUCO that a competitive market exists.
The plan also calls for increased use of "advanced energy technologies" by 25 percent by 2025 as
a way to keep and attract new jobs, while modernizing Ohio's aging power plants and transmission
lines.
Strickland's plan has "something for everybody," said Kevin Walker, president and chief
operating officer of AEP Ohio. But Walker was curious about how some of Strickland's ideas would
look if approved.
"We feel there is a market," Walker said. "But it's going to be interesting how we define a
'competitive market.' "
Speaker Jon A. Husted, R-Kettering, and Senate President Bill M. Harris, R-Ashland, released a
statement yesterday that expressed appreciation for Strickland's work but offered no opinions on
the plan. Each declined to elaborate.
Strickland hopes the legislature will act by the end of the year.
Environment Ohio commended Strickland's "first step" regarding renewable sources. But other
states are requiring that a greater percentage of electricity come from those sources, and the
environmental advocacy group plans to work with legislators to improve on Strickland's plan.
The group also is concerned that the plan lacks penalties if the governor's goals aren't
met.
"That's a big problem," said Erin Bowser, Environment Ohio's state director. "If there are no
penalties, then where's the stick?"
Strickland said the state should not deal with rates without addressing issues such as renewable
power-generation sources. This month, some of the state's largest manufacturers argued against that
point, but they seemed to back off yesterday.
"The governor clearly shares our goal of placing consumers on equal footing with utility
companies," Eric Burkland, president of the Ohio Manufacturers' Association, said in a
statement.
Officials with Direct Energy of Houston, a third-party energy provider that wants to enter the
Ohio market, said they are encouraged by Strickland's plan, although much work remains.
Strickland also wants to increase energy efficiency in Ohio. Janine Migden-Ostrander, Ohio's
consumer counsel, praised that idea but wondered about Strickland's call for more input from
consumer groups about rates and regulations.
"I'm hoping the process would be such that we would get the time and data that we need," she
said.
Dispatch reporter Jim Siegel contributed to this story.
mniquette@dispatch.com
paul.wilson@dispatch.com
Energy proposal
Gov. Ted Strickland's energy plan:
- Gives utilities a choice of having the Public Utilities Commission
of Ohio approve negotiated rates based on the cost of producing power
(an "electricity security plan") or seeking approval to set prices
based on the market ("market-rate plan") -- but only if the PUCO
determines that a competitive market exists.
- Requires that by 2025, a minimum of 25 percent of the
electricity sold in Ohio be generated by "advanced-energy technologies"
such as clean coal, advanced nuclear power and fuel cells. At least
half of that amount must come from renewable energy sources such as
wind and solar power, and half of the advanced energy must be produced
in Ohio.
- Requires that all side deals and special contracts that
utilities have with customers be filed with the PUCO, asks that
utilities improve measuring and reporting on their service, and
encourages use of advanced meters showing when consumers can use
less-expensive power.
- Gives organizations representing consumer groups equal
footing with utilities in consultations and negotiations with the
administration on electricity regulation.
- Makes upgrading Ohio's aging power plants, transmission
lines and distribution networks a priority and gives the Ohio Air
Quality Development Authority more duties, including pooling
electricity purchases for state facilities and providing better cost
financing for new power-generation projects.
- Increases energy efficiency by requiring that Ohio utilities
meet no less than 25 percent of projected growth in electricity use and
10 percent of total peak demand by 2025 through energy-efficiency
measures.
- Addresses global warming by better monitoring of greenhouse-gas
emissions and pushing for "carbon-sequestration" projects that inject
deep underground the carbon dioxide produced from burning coal to make
electricity.
