A stalemate between Gov. Ted Strickland and Republican legislative
leaders over electricity regulation ended yesterday with a deal that
leaves the rates for American Electric Power customers with a state
commission.
Rates are going up for AEP customers in central and southern Ohio,
who currently pay the lowest among customers of the state's major
utility companies. During months of negotiations on the energy bill,
the question has always been "by how much?" Under the latest version of
the bill, the Public Utilities Commission of Ohio will provide the
answer.
After months of talk, hours of committee testimony, more than 20
rewrites and untold thousands of dollars spent on a truckload of
lobbyists, the House voted 93-1 for Senate Bill 221. The Senate is
expected to concur today.
"This bill gives the maximum amount of protection to make sure that
energy prices moving forward will remain stable," said House Speaker
Jon Husted, R-Kettering.
Strickland said it would be unrealistic to assume that prices won't increase in "very moderate ways."
The bill, however, "protects the consumers from having to pay
unjustified prices for a commodity that is essential for them and is
delivered in an atmosphere where a competitive retail market does not
currently exist," he said.
But others, including Janine Migden-Ostrander, the Ohio consumers'
counsel -- the state's advocate for residential utility consumers --
said the bill still would leave utilities "significant opportunities to
request rate increases."
"I recommend that customers look very seriously at energy
efficiency, change out your light bulbs and do whatever you can to
mitigate the rate increases that are coming," she said.
Husted and House Republicans essentially agreed to the same offer
Strickland put on the table last week: letting the PUCO use an
"excessive earnings" standard to judge whether utilities are earning
too much compared with similar companies and giving the commission more
control over how a utility moves into an open, unregulated market.
Elected leaders have been trying to craft a new system of
electricity regulation in Ohio before the current rate caps expire at
the end of 2008. Although Strickland has favored a more-regulated rate
system, Husted has preferred giving utilities a more-defined option to
move into an open market.
The result is a bill that would give the PUCO power to set
state-regulated rates. If a company chooses to move into an unregulated
market, the commission would determine, over 10 years, what percentage
of power can be sold at market rates.
Ohio manufacturers praised the bill. AEP did not get the rate-making structure it wanted.
"It appears that the House amendments provide a workable approach
going forward, including preserving a market-rate option and a
mechanism for future-generation investment in Ohio," said Melissa
McHenry, spokeswoman for the Columbus-based utility.
Husted said much of the success or failure of the plan will fall on
the PUCO, a panel of five gubernatorial appointees that was criticized
before deregulation in 1999 for favoring utility companies at the
expense of consumers.
"(It's) probably more authority than I'm comfortable with," Husted said.
Strickland, who has made two appointments to the commission, said he is confident it will be fair to customers and utilities.
GOP lawmakers also struggled to swallow Strickland's "excessive
earnings" proposal, which the governor called a vital consumer
protection.
"It's difficult to live with, because it kind of defies the concept
of free enterprise and business as we know it," said Senate President
Bill M. Harris, R-Ashland.
Husted said the provision should have little impact if the PUCO sets proper rates.
The bill also contains key green-energy provisions, requiring that
at least 25 percent of electricity generation in Ohio come from
renewable or advanced energy sources by 2025, and that power usage
become 22 percent more efficient by 2025. Annual benchmarks, backed by
financial penalties, would motivate utilities to ramp up their green
production.
"Not only will an investment in renewable energy reduce pollution,
it will also boost our manufacturing base and put Ohioans back to
work," said Erin Bowser, director of Environment Ohio, an advocacy
group.
Lobbying on the bill has been intense, so much so that Husted called
members into the House chamber yesterday and had them wait a good 30
minutes while the final draft of the bill was completed. Lobbyists are
not allowed in the chamber, except for on the balcony.
"There was just no end to the amount of things people wanted to change about the bill," Husted said.
jsiegel@dispatch.com
