Ohio Senators might have derailed Gov. Ted Strickland's plan for wind farms and other...renewable en

[Kolesar]

Regulation of electricity rates will end in Ohio at the end of 2008. Last summer, Governor Strickland proposed a "hybrid" reregulation plan to protect all consumers of electricity. Utility First Energy responded by hiring every lobbyist they could get and proceeded to insert amendments that hobbled Strickland's plan.

The utilities are getting about everything they could ask for.

This long article in the Plain Dealer explains it at length. Here are some key excerpts that would be of concern to environmentalists and consumer advocates.


http://blog.cleveland.com/business/2007/11/the_bottom_line_on_electricity.html

Senators might have derailed Gov. Ted Strickland's plan for wind farms and other forms of renewable energy.

What if your bank suddenly changed your mortgage rate? Bet you'd do what it took to find out why. That's kind of what's happening in Columbus. Lawmakers are trying to figure out how utilities should calculate what you pay for electricity. But a lot of people find the topic easy to ignore. The discussion is loaded with jargon like "rate stabilization" and "electric security plan." And it practically takes college math to figure out a utility bill, anyway. The bottom line is: You're going to pay more to turn on your lights. Plain and simple. Here's why.

The issue

Ohio's seven-year failed experiment in utility deregulation is ending. The question is: What will replace it? Gov. Ted Strickland wants to rewrite Ohio's utility laws. He calls his proposal "Energy, Jobs and Progress."
Right now, the law puts limits on your rates. But that will end in 2009. Utilities then will be able to ignore regulators and set your rates based on the wholesale market where they buy electricity.

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Hidden changes

The power companies fumed over the governor's proposal and sent an army of lobbyists, public-relations specialists and big-gun attorneys to head off the bill in the General Assembly. After more than 50 hours of public hearings, the Ohio Senate approved a substitute bill 12 days ago. Buried in 87 pages of legal-speak are dozens of subtle amendments. Among the changes: Consumer rates -- including FirstEnergy's, the highest in the state -- will never decrease. Senators added language to the bill that sets February 2008 rates as the starting point for increases, which would be negotiated with the PUCO.

That change was far different from what Strickland proposed. In his version, new Ohio rates would be determined by what it actually cost utilities to generate the power, including the value of power plants and a rate of return -- the way it always was when utilities were regulated. The thicket of Senate alterations also means manufacturers and other big industrial users would keep their deep discounts indefinitely. They had argued that without them, Ohio manufacturing would be unable to compete.

Renewable energy

Other last-minute modifications probably will dash the governor's vision of wind farms and other clean-power plants. The original bill required utilities by 2025 to produce 25 percent of the power they sell with wind, solar and other "advanced energy" systems such as fuel cells, high-tech coal and nuclear plants. That would create "tens of thousands" of jobs in new industries, jobs that are already being created in states with similar renewable rules, the governor argued.

Strickland's version gave the PUCO the muscle to set periodic goals for each utility to meet to reach 25 percent by 2025. It also required annual progress reports to lawmakers.

When senators were done with it, the bill still required the PUCO to make annual reports, but the commission couldn't set interim benchmarks. Instead, the PUCO would be required to hold only one hearing -- in 2025. If utilities drag their feet, they would not be required to expand renewable-energy sources if doing so would raise overall average rates more than 3 percent. The city of Cleveland, environmental groups and the consumers' counsel argue that the new language means no wind turbines will be built here, no wind turbine manufacturers will come to Ohio, and no jobs will be created.

The Strickland administration counters that renewable energy would be on the table every time a utility asked the PUCO for a rate increase. An Ohio House committee began hearings last week and plans a leisurely pace -- one hearing a week -- through January, a slap in the face of the governor, who asked lawmakers to approve his bill by Dec. 31.
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