Competitive electricity market hasn#8217;t developed

Published 12:00 am Friday, November 23, 2007

In 1999, following a trend among many other states, the General Assembly passed Senate Bill 3, which sought to deregulate Ohio’s electric industry with the hope that a more open, competitive market would lead to lower prices for consumers and businesses.

During discussion and debate on the proposal, several things came to light that influenced the final version of the bill.

First, one of the prime reasons lawmakers took action on the issue was the belief that the federal government was going to eventually require all states to deregulate their electricity markets, and if Ohio wanted to have any control over the process, it needed to enact its own electric deregulation policy. The idea was that competition would drive down the cost of electricity, much like it did for long distance telephone service.

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In addition, it was uncertain how an open electricity market would materialize in Ohio. As a safeguard, SB 3 included a rate stabilization plan that guaranteed that electric rates would not increase until a viable, competitive market developed. Unfortunately, this stabilization plan is due to expire in 2008, and for whatever reason, a competitive market for electricity has yet to develop.

Looking ahead, many Ohio consumers and business leaders have voiced serious concerns that unless the state installs a new plan after the rate freeze expires at the end of next year, electricity prices could skyrocket. In fact, when Maryland deregulated their electricity market this past summer, some consumers were hit with a 72 percent increase in their monthly electric bill.

In an effort to prevent this doomsday scenario, over the last several months, the Governor, legislators and hundreds of stakeholders have engaged in considerable discussion and debate about possible solutions to the issue. Gov. Strickland got the ball rolling in August when he unveiled a comprehensive energy package aimed at not only protecting against steep electricity rate increases, but also expanding Ohio’s alternative energy portfolio, including emphasis on developing wind, solar, clean coal and hydro power, to name a few.

Since then, the Senate has worked with interested parties and the Administration to make some key improvements to the Governor’s plan, while keeping intact some of the bigger aspects of the bill, which was introduced in the Senate as Senate Bill 221.

Luckily, SB 221 recognizes the contribution of the coal industry and seeks to utilize clean coal technologies, and as Ohio’s most abundant resource, we must work to ensure coal remains an integral part of our energy future.

It is also important in this push to develop alternative energy markets that we are careful not to artificially drive up the cost of electricity through the use of unproven energy technologies.

SB 221 creates a foundation for Ohio’s energy future, and no matter its outcome, will have a tremendous impact on our economy, the environment and Ohio consumers. Therefore, it is important that we take our time, listen to all sides of the issue and pass a bill that puts Ohio in the best position to succeed now and in the future.

John A. Carey is a member of the Ohio Senate and represents the 17th District.