State regulators' investigation of the electricity market in Ohio has focused too much on ways to help energy companies and has largely ignored consumer issues, according to a coalition of consumer groups.
State regulators’ investigation of the electricity market in Ohio has focused too much on ways to help energy companies and has largely ignored consumer issues, according to a coalition of consumer groups.
“(C)onsumer protection issues should be given the same (or greater) level of regulatory attention in this process as the attention now being devoted to the market structure issues that are the current focus of the workshops,” said a letter signed by 11 groups, including the Office of the Ohio Consumers’ Counsel, the Ohio Partners for Affordable Energy and AARP.
Those groups worry that Ohio may be heading toward a system in which consumers have many energy options, but little access to information about how to effectively use the options, and few restrictions on misleading solicitation practices by energy companies.
“If you believe in free markets, and I believe in free markets, then you need to have the seller selling to an informed customer,” said Dave Rinebolt, executive director of Ohio Partners for Affordable Energy, which serves low-income customers.
State regulators say that consumer issues are being addressed, but not in the investigation referenced in the letter.Instead, the Public Utilities Commission of Ohio is reviewing consumer issues such as rules governing energy-solicitation practices in a separate case that was initiated last year, said Jason Gilham, spokesman for the PUCO.
He also noted that the consumer groups are at the table for both the investigation and the rules review.
“They are definitely active (participants) for all of this,” he said.
The PUCO began the investigation last December by asking for comments about what barriers exist to a “fully competitive retail electric service market.” The commission also asked if the current system of regulated pricing constitutes a barrier to competition.
What followed has been hundreds of pages of testimony from energy companies, trade groups and consumer advocates.
A few patterns emerged:
• Alternative electricity suppliers, such as Direct Energy, are saying they are too often hindered in their pursuit of customers, including unfair competition from utilities that offer regulated prices.
• Utilities, such as FirstEnergy, are saying that it is premature to consider a dramatic shift in market structure that would end regulated prices.
• Consumer advocates are asking for a broad look at the solicitation practices of the alternative suppliers, while also calling for regulators to continue regulated prices.
The sides disagree about whether the PUCO could vote to end regulated pricing, or whether that would require action by the Ohio General Assembly.
Each utility has its own way of setting the regulated price. In central Ohio, American Electric Power has a “standard service officer” whose charges have been reviewed and approved by regulators. Customers automatically receive the standard offer unless they choose to sign up for a different rate plan with an alternative supplier.
The alternative suppliers would like to see a system in which the regulated price changes more often — even hourly — to reflect changes in the market price. They also would like to see a phase-out of regulated pricing altogether.
“(F)ully competitive retail markets which no longer rely on a utility-provided default service are in the best interests of customers,” said a filing from the Retail Energy Supply Association, a national trade group.
The investigation probably will continue into next year, Gilham said. After that, the next steps will be up to the PUCO and perhaps the legislature.
©2013 The Columbus Dispatch (Columbus, Ohio)
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