A bill pending in the Ohio House of Representatives that would amend regulations covering how the cost of electrical service to consumers is calculated is being opposed by the Ohio Consumers’ Counsel. House Bill 317 seeks to amend Ohio’s electric security plan law that was adopted in 2008 and replace it with so-called competitive power plans. Under the ESP format, electric distribution utilities provide customers in their certified territories a standard service offer of retail electric services. But the bill’s plans would retain an anti-consumer feature of the old plan – add-on charges known as riders - said Jeff Jacobson, of the Strategic Insight Group, in testimony before the House Public Utilities Committee. Jacobson was testifying on behalf of the Ohio Consumers Counsel. He said a rider is what the Public Utilities Commission of Ohio used to subsidize and bail out the Ohio Valley Electric Coalition coal plants owned by American Electric Power, Duke Energy and AES at consumer expense. “And a rider was what the PUCO was going to use to bail out FirstEnergy’s nuclear plants at consumer expense, until (the) Federal Energy Regulatory Commission put an end to it,” he told the committee. “Of course, among the provisions of House Bill 6 that were most expensive and detrimental to consumers were a First Energy nuclear plant bailout to replace the failed rider and a now codified and permanent version of the OVEC coal bailout rider.” He called the name “competitive power plans” a misnomer, saying they should be limited to creating utilities’ competitively-bid standard offers that have been good for consumers. “The so-called competitive power plans allow utilities, with PUCO approval of riders, to charge consumers for monopoly distribution services. General rate cases, not riders, should be used for setting monopoly distribution charges. The bill continues the bad approach of riders from the 2008 law,” he said. HB 317 riders give the PUCO too much discretion in establishing rates, he added: “Even before the (First Energy) scandal the PUCO at times misused its authority, creating a utility subsidy culture at consumer expense. That included granting First Energy the infamous “distribution modernization” charge, which was not required to be used on either distribution or modernization – and the (Ohio) Supreme Court declaring the PUCO’s decision unlawful. That decision wrongfully cost Ohioans nearly half a billion dollars which have never been refunded, despite the court’s decision.” Robert Kelter, an attorney with the Environmental Law and Policy Center, gave qualified support for HB 317 in his proponent testimony to the House committee, The ELPC too would like to get rid of riders, he said, “but we’ve listened to the debate and understand the legislature’s desire to allow utilities to increase spending in some areas without rate cases.” Kelter credited the bill for establishing a check on the system through an excessive earnings test that prohibits utilities from earning excessive profits from adding riders. He described utilities in Ohio as “regulated monopolies,” with the state granting them monopoly status to provide electric service and the utilities agreeing to a regulatory framework that limits their profits to a reasonable level. “Regulation by the Public Utilities Commission of Ohio replaces competition and protects customers,” he said, but the “PUCO lacks the resources and experts to monitor the utilities and the system depends on transparency and utility honesty.”

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The Press 1550 Woodville Road Millbury, OH 43447