Thanks to The Plain Dealer for identifying the who, what, when, where, why, and how Ohioans became some of the most ripped-off energy customers in the U.S.
In 2008, the Ohio Legislature enacted Senate Bill 221, allowing state regulators to develop “electric security plans.” Those plans let utilities add riders to bills beyond the basic costs of distribution services and investments.
“Customers’ base-distribution rates have not changed since 2009 and will continue to be frozen through May 2024,” said spokesman Mark Durbin of FirstEnergy, which provides electric distribution and transmission service to more than 2 million Ohioans through three regulated utilities companies.
However, the company’s utilities and others in the state have added a variety of extra charges to their bills, called riders.
“The use of riders is common among all Ohio utilities, and has been for years,” Durbin said, noting that riders are subject to Public Utilities Commission of Ohio review and approval.
The Public Utilities Commission of Ohio (PUCO) is supposed to protect Ohio consumers from being exploited by utility companies and special interest groups. Coincidentally, earlier this year, Activist Post reported about a former chairman: “Ohio and Connecticut Utility Regulators “Wined and Dined” by Energy Lobbyist in 2017. Ohio Regulator Working for Industry Again.”
Argh. Back to The Plain Dealer:
Continuation of riders, subsidies and other policies has shifted away from the state’s original 1999 goal of deregulating the state’s retail electricity markets.
Competition in electric markets has kept bills from climbing even higher, according to researchers at Ohio State University and Cleveland State University. Competitive generation markets have saved Ohioans $23.9 billion since 2011, the researchers reported in an August 2019 analysis prepared by the Northeast Ohio Public Energy Council.
At the same time, regulators could have done a better job protecting consumers, the researchers said.
“Ohioans would have seen even greater savings had state regulators been more frugal in their approval of these non-bypassable charges [added to the delivery side of the bill]” said Chuck Keiper, executive director of NOPEC.
No kidding! Back to The Plain Dealer:
An American Electric Power spokesman said the PUCO bears some of the burden.
“AEP Ohio is focused on delivering electricity to our customers and making improvements that make our distribution system smarter, more reliable and more resilient,” AEP spokesperson Scott Blake said. “Many of the charges referred to in the report are directly related to these improvements and are regulated by the PUCO as well as other government agencies.”
Ohioans have also been paying dearly for “Making distribution systems smarter” (see 1, 2) thanks to PUCO who recently boasted how Smart Meters allow them to collect and share customer data. Of course, utility companies are pretty jazzed about this, too. Knowing exactly when their customers use their gas and electric 24/7 and what for gives them the opportunity to try to sell their customers additional products and services. Utility companies can also sell this private data to third parties and then they can also try to sell these utility customers other products. This is referred to as “Surveillance Capitalism”. Creepy isn’t it?
Back to The Plain Dealer:
A 2018 analysis by 24/7 Wall Street calculated Ohioans’ average monthly electric bill at $111. Average electricity use was 23rd lowest among the states, yet Ohio ranked two places higher for costs — meaning its people paid disproportionately more for electricity.
Those higher costs also reflect a disparity between wholesale and retail electricity prices. Ohio is part of the PJM regional grid, a mid-Atlantic regional transmission organization, where wholesale prices have had some significant drops and an overall downward trend since 2008. For the most part, however, the trend in Ohio’s retail electricity prices has been upward, even at times when wholesale electricity prices have fallen.
“Since deregulation in 1999, Ohioans have been made to pay an astounding $15 billion in subsidies to electric utilities,” energy industry consultant Michael Haugh told lawmakers in June, speaking on behalf of the Office of the Ohio Consumers’ Counsel.
$15 billion! The Plain Dealer provides more information on how Ohioans have also paid for utility companies’ bankruptcy and bailouts thanks to PUCO not protecting them from being exploited. It doesn’t seem like PUCO plans to stop this anytime soon either.
Article first published on the Activist Post under a Creative Commons 2019 licence.