Ohio’s electric choice marketplace


COLUMBUS – Three months into the second year of Ohio’s “electric choice” program, the Ohio Consumers’ Counsel says progress remains steady, but slow.

“While we are making progress in Ohio, it continues to be slow,” said Consumers’ Counsel Rob Tongren. “It’s time for state policy makers and regulators to start feeling an increasing sense of urgency about the future.”

Who switched? Since January 2001, more than 626,000 residential electric customers, or approximately 16 percent of all residential customers eligible to participate in Ohio’s electric choice program, have switched to a different supplier. The majority of customers who have switched have done so as part of a community aggregation, or collective buying group. Viewed from this perspective, Ohio continues to be a leader among states that have restructured their electric power industries.

The flip side of the coin is that just two of Ohio’s state-certified suppliers are actively marketing to residential customers at the current time. Consequently, residential customers in some parts of the state have limited supplier choices. Residential customers served by Dayton Power and Light, Monongahela Power and Ohio Power still have not had any opportunities to switch suppliers.

“Clearly, we still have a lot of important work to do,” Tongren said. “If certain critical issues are not addressed in a timely manner, the price consumers pay for electricity is likely to rise when electric choice price controls begin to disappear for Dayton Power and Light customers at the end of 2003.”

Suppliers’ input. The counsel recently canvassed suppliers certified by the state to provide electric service to residential consumers to gather information about why a competitive electric marketplace has been slow to develop in Ohio.

Input from suppliers indicates that the combination of relatively higher wholesale electric prices and the comparatively low retail prices established by law for customers of Ohio’s electric utilities leaves little room for new suppliers to compete.

Additional factors suppliers cited as obstacles to effective competition included difficulties interacting with the local electric utilities, billing problems, unresolved transmission grid problems and regulatory uncertainty.

Policy reviews. At the state level, the Ohio House of Representatives recently announced plans to develop recommendations for a statewide energy policy.

“The news at the federal level is far less encouraging,” Tongren added. “A competitive wholesale electric market is essential if the competitive retail electric market envisioned in Ohio’s electric choice legislation is ever to materialize.”

The Ohio Consumers’ Counsel opposed federal action to defeat an amendment offered by Sen. Larry Craig, R-Idaho, to S. 517, the federal energy bill. The Craig amendment sought to protect consumer protection standards contained in the Public Utility Holding Company Act and maintain the authority of the Federal Energy Regulatory Commission to oversee the development of a competitive wholesale electric market.

The complete text of OCC’s report is available online at www.pickocc.org or by calling toll-free 1-877-PICK OCC.


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