History of Energy Deregulation in the USA: Ohio

Ohio energy deregulation

Ohio energy deregulationDecades of government regulation succeeded in creating utility monopolies throughout the United States. Without competition, public utilities had no incentive to control costs or provide better service to its customers.

In the state of Ohio, however, utility customers have a choice.

A Brief History of Energy Deregulation in Ohio

In 1999, 4 companies, AEP Ohio, Dayton Power & Light, Duke Energy, and FirstEnergy, generated 91% of the power in Ohio.

Consumers had only one organization representing them, the Public Utilities Commission (PUCO), and had virtually no choice in their electric service.

Beginning in 2001, customers could now choose to buy energy from Certified Retail Electric Suppliers (CRES) instead of automatically receiving it from the utility company in their area.

Although deregulation got off to a rocky start–not unexpected considering the difficulty it takes for any type of massive change to take effect–deregulation is working. Ohio’s deregulated market provides consumers with better services, better rates, and choice.

Consumers in the Buckeye State can now choose from a variety of providers and offers, including fixed and variable-rate plans, with different durations and contract terms.

Because competition gives consumers a choice, energy providers must keep rates down and provide better service in order to maintain customers.

Timeline of Energy Deregulation in Ohio

  • June 1998. The Ohio Public Utilities Commission (PUCO) instituted a pilot program that experimented with innovative pricing through conjunctive electric services. It allowed ratepayers to band together for a collective billing under rates designed for that group.
  • August 1998. After approving Monongahela Power’s request for conjunctive electric service two months prior, a lawsuit challenging PUCO‘s right to issue permission was thrown out of court, paving the way for further deregulation.
  • June 1999. Proposed legislation would allow consumers to choose their energy provider beginning on January 1, 2001. The proposed legislation also included a 5% rate reduction and a 5-year rate freeze.
  • July 1999. On July 6, 1999, Governor Bob Taft signed Senate Bill 3 into law, which included the aforementioned energy restructuring provisions along with providing consumer protections, labor protections, and environmental provisions. Utility companies were also ordered to spend $30-million over the next six years for consumer education.
  • September 1999. Almost 500,000 consumers switched suppliers, most of them in the Philadelphia area where utility prices were among the highest in the state.
  • January 2001. nearly 100,000 consumers switched suppliers during the first month of Senate Bill 3’s enactment.
  • January 2002. The Ohio Consumers’ Council (OCC) released a report analyzing the first year of Senate Bill 3. The OCC finds that about 15% of customers switched suppliers and that electricity consumers felt they were better off now that they had a choice.
  • April 2002. PUCO released the Ohio Retail Electric Choice Programs Report of Market Activity for the Year 2001 to the Ohio General Assembly. The report summarized activity during the previous year, including which companies saw the most customer activity.
  • January 2003. PUCO released its report, stating that 813,000 customers (about 20% of those eligible) switched power suppliers since the law had been enacted two years prior. Most of the switchers participated in community aggregation groups.
  • May 2008. Governor Ted Strickland signed into law Senate Bill 221, significantly revising the regulatory structure for electric public utility companies and putting forward new policies for developing advanced and renewable energy.

What is Energy Choice?

As previously stated, in the state of Ohio, consumers are able to select their Certified Retail Electric Suppliers (CRES) instead of automatically receiving it from the utility company in their area. With this freedom comes a responsibility on the part of consumers to make the best choice for their business or family.

The DeregulatedEnergy.Com directory contains all the information you need, including the names of retail energy providers in Ohio, the regulatory office overseeing utilities, the regional transmission organization or independent system operator for both gas and power, and in what FERC region Ohio is located.

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