Ohio energy bill fizzles out in House

Published 12:00 am Tuesday, April 22, 2008

House Speaker Jon Husted’s blueprint for a freer Ohio energy market is voluminous and complex. But the reason it fizzled last week is simple: its effect on electric bills.

After months of negotiations — both public and private — the Republican-controlled House appeared poised to pass its rewrite of Gov. Ted Strickland’s energy bill at long last. The bill featured a unique, hybrid approach to moving power companies from monopoly to market, retaining some of the protection that regulation can provide while setting rules for freeing utilities to compete more like other businesses.

But early praise for the measure, by people who had been watching the process closely, broke down.

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Ohio Consumers’ Counsel Janine Migden-Ostrander, for example, had begun by praising the House plan. After reading the fine print, she suddenly changed her tune — issuing a 10-point list of major concerns with the measure.

Migden-Ostrander, paid to represent residential utility customers, painted a picture of a bill under which utilities could get around regulators, certain industrial customers could get around the rates others paid, and rates could far exceed market prices because the timetable laid out for monitoring the rates was too lax.

Strickland, meanwhile, threatened a veto.

The Senate adjourned for the week Wednesday, signaling to the House that its members weren’t interested in sticking their necks out for such a controversial bill.

Strickland, a Democrat, said he offered House negotiators four options for determining how utilities can amass profits: base them on costs, return on equity a utility owns, a ‘‘just and reasonable standard’’ as regulators currently do, and preventing excessive earnings. He said all four were rejected.

It was that threat that colored the week, and found Husted — during the wee hours of Monday, then Tuesday, then Wednesday — without a deal.

Looming was the reality that opening Ohio’s electricity market to competition is going to raise rates — possibly every electric customer in Ohio, but certainly those in American Electric Power territory, where rates have been kept the lowest by regulation.

Getting behind a bill that’s going to raise rates for all — on the way to a fairer market in which power companies are using more renewables and encouraging energy efficiency — is politically difficult under the best of circumstances.

Without consensus between the House, governor and Senate, it became impossible.

Julie Carr Smyth is a reporter for The Associated Press