Ohio

Restructuring Overview  |  Public Benefits  |  Restructuring Resources  |  Consumer Protection  |  News and Analysis

Legislation Passed
Electric Y Gas Y (PUC)

1999, SB3; Initial Restructuring Bill

Electric
Overview

• 1999: The restructuring law mandated retail choice for consumers by January 2001. It froze electric rates for five years and cut residential customers rates by 5%. This legislation retains the utility as the default service provider and establishes rate caps for the "market development period" through 2005.
• The Public Utility Commission of Ohio (PUCO) has approved all five utility restructuring transition plans, which detail how the companies will separate their regulated and unregulated operations, make the operational and technical support changes needed to accommodate customer choice, and implement educational programs to inform customers about their options.
• The Ohio restructuring legislation also endorsed the PUC’s long-standing universal service programs for low-income customers. The Percentage of Income Payment Plan (PIPP), in which low income customers are required to pay no more than 15% of their annual household income for electricity and natural gas service, will continue and be integrated with the federal LIHEAP or fuel assistance program administered by the Ohio Department of Development. This program, as well as increased energy efficiency programs, will be funded by riders included in regulated utility rates and paid by all customer classes.
• To promote competition in the state, the law established a target for 20% of each utility's customers to switch to a new supplier. Utilities that do not reach the 20% target within the five-year market development period will lose recovery funding that covers any financial losses resulting from deregulation.
• July 2002: The Ohio Consumer Advocate’s Office issued a report stating that electric choice for residential consumers had begun to stall. While about 725,000 residential customers, mostly in northern Ohio, had switched suppliers since Jan. 1, 2001, active competition among electric suppliers was virtually nonexistent today. New Power Corp., one of two active residential suppliers in the state, had recently declared bankruptcy. As a result, consumers in central and southern Ohio had no alternative to their local utility. No other electric marketing company so far has offered to compete with DP&L in the Dayton area. The remaining supplier in northern Ohio is an affiliate of FirstEnergy, the power company in Toledo, Cleveland and Akron. The subsidiary operates only in FirstEnergy's service territory.
• December 2002: The PUCO rejected FirstEnergy Corp.'s bid to reduce the amount of money its customers can save if they switch to an alternative electric supplier.
• February 2003: After the PUCO approved a fee that consumers will now have to pay to extend power lines to new homes, the Ohio Consumers' Counsel filed a notice of appeal at the Ohio Supreme Court challenging the new charge.
• April 2003: The PUCO approved a two-year electric rate-freeze extension requested by the Dayton Power and Light Company.
  
• May 2003: PUCO issues its annual Electric Choice Market Activity Report claiming that Ohio’s experience is among the best in the nation.
  – The Dayton Power and Light Co. announces that it has reached an agreement with public-interest groups to freeze its electric distribution rates through 2008. The plan also permits DP&L to file for generation rate increases beginning in 2006 to pay for potentially higher costs for fuel, security, taxes and environmental compliance.

Choice Status

• Access to competitive suppliers became available to all consumers in January 2001. As of March 2003, 792,440 of Ohio's approximately 4 million residential customers eligible for choice (about 19.5%) had switched to competitive suppliers. Many of these were switched as part of community-wide buying groups, and most were in the territories of FirstEnergy utilities -- Cleveland Electric Illuminating, Toledo Edison or Ohio Edison.

Natural Gas
Overview

• Retail unbundling by the major gas utilities in Ohio is being implemented through Ohio Public Utilities Commission orders and stipulations with individual companies. Unbundled service in the residential and small commercial sectors began with a pilot program for Columbia Gas of Ohio customers in April 1997. Pilot programs for Cincinnati Gas & Electric and East Ohio Gas began in late 1997. In June 1998, the Commission allowed the Columbia Gas and Cincinnati Gas & Electric programs to expand to include all customers in their service territories. The East Ohio Gas program expanded systemwide by the third quarter of 2000.  Vectren launched a customer choice program in November 2002 and plans to make it available to all of its 300,000 customers by September 2003.

Choice Status

• As of May 2003, 528,876 (42.6%) of Columbia Gas' 1,239,467 residential customers were enrolled in customer choice, compared with 28,171 (7.4%) of 379,431 for Cincinnati Gas & Electric, 559,224 (52%) of 1,078,716 for Dominion East Ohio Gas, and 1,776 (0.83%) of 213,164 for Vectren.
   

Choice education
Ohio Electric Choice
1-888-632-1314
www.OhioElectricChoice.com/
This state website explains electric restructuring in Ohio and offers suggestions on how to pick a supplier. The site also features a list of suppliers and links to their sites.

Suppliers
www.ohioelectricchoice.com/residential/cert.asp
www.puc.state.oh.us/Consumer/GasChoice/gaschoicebrochure.html

Northeast Ohio Public Energy Council
1-877-682-7794
www.nopecinfo.org/
The Northeast Ohio Public Energy Council, or NOPEC, represents more than 600,000 individual households and businesses in Northeast Ohio. Its goal is to provide the lowest possible utility rates, as well as long-term stability in prices, under Ohio's new deregulation law.

Public Benefits

Ohio's restructuring legislation established two separate public benefits initiatives: a Universal Service Fund (USF) for low-income customer assistance programs and an Energy Efficiency Revolving Loan fund, both financed by "riders" or surcharges on electric bills. The USF includes Ohio's existing percentage-of-income-payment-plan (PIPP) and a targeted low-income energy-efficiency and consumer energy education program. The universal service fund rider revenue totals about $75 million annually, of which $15 million is for low-income energy efficiency and consumer education, with the remainder for the PIPP. The revolving loan fund rider averages about $15 million per year and provides financial incentives for investments in energy-saving measures in homes and businesses. (Click here for details on the state’s low-income energy and general residential energy programs.)

Aggregation - buying coops

• Ohio’s Electric Choice law allows two types of aggregation: affinity groups and municipalities. Affinity groups include churches, school groups, trade organizations, and businesses. Municipalities include counties, towns and cities.
• With municipal aggregation, residents can opt-in or opt-out. Under the opt-in approach, the government entity asks consumers to sign up for its buying pool, whereas the opt-out approach requires the municipality to hold a referendum to get voter permission to serve as their aggregator. Most Ohio governments exercising this option are choosing "opt-out" aggregation. "Opt-out" aggregation is a program that automatically enrolls all local residents, unless they individually opt-out of the program (choose not to be included).
  

State Restructuring Resources

Utility Regulatory Commission
Public Utilities Commission
1-800-686-7826
www.PUCO.ohio.gov/

Consumer advocate
The Ohio Consumers Counsel
1-877-742-5622
www.state.oh.us/cons/

Grassroots groups
Ohio Citizen
The website features current news on energy, among other environmental issues. The search engine on the home page can be used to find recent articles on deregulation in Ohio.
www.ohiocitizen.org/

Citizen Power
412-421-6072
www.citizenpowerinc.org
CITIZEN POWER is dedicated to ensuring that low-income consumers and environmental interests are represented in the process to deregulate the electric generation industry.

Consumer Protection

Disconnection policy

• From November 1 through April 15, the local electric utility must give customers an additional 10-day notice before it disconnects service.
• From October 22 to April 12, The Winter Reconnect Rule allows residential customers facing disconnection – or who have already been disconnected – to pay a maximum of $175 to have service maintained or restored.
• Utilities cannot disconnect residential service at any time during the year if the customer has a household income less than or equal to the federal poverty guideline, participates in the state Percentage of Income Plan, and applies for all energy assistance for which he/she is eligible.
• Customers who fail to pay their bills by the due date will receive a 14-day notice from the local electric utility before service is disconnected
• An electric supplier may terminate a contract after a 14-day written notice if customers fail to pay or to meet any agreed-upon payment arrangements.

• Utilities must offer residential customers in danger of disconnection for nonpayment one of two payment plans: 1) six monthly payments on arrearage and full payment of current bills, or 2) payment of one-third of the balance due each month.

Customer service

• Suppliers must reveal the type of rate they offer: a fixed rate (same rate throughout the duration of the contract) or a variable rate (a rate that can fluctuate based on numerous factors), as well as a clear explanation of factors that cause a rate to vary.
• Every certified electric supplier must provide a service contract upon enrollment. Included on that contract must be the following information: the supplier’s name, phone number, address and toll-free number as well as the PUCO’s toll-free number; switching fees to transfer from the local utility to a new supplier; an itemized list of prices, fees and the amount of recurring and non-recurring charges, in addition to the billing cycle and late payment fee information; and the electric suppliers’ complaint handling procedures.

Deposits/fees

• Electric suppliers must provide information regarding any deposit in the customer contract. When service is terminated, the deposit must be applied to the final bill and any excess promptly refunded.

Right to cancel

• After customers sign up with an electric supplier, their local electric utility will mail them a confirmation. Customers have seven days from the postmark date of this notice to cancel the contract.
• Customers may be subject to a minimum stay requirement for default service. Customers who switch during the summer months are subject to a 12-month minimum stay provisions, but customers who switch back into default service during any other month may do so without restriction. Customers may also be subject to a maximum $5 switching fee.
• Customers have the right to terminate an electric supplier's contract without penalty if they move outside the electric supplier's service area or into an area where the electric supplier charges a different price; or, the contract allows the electric supplier such a right in response to changing market reasons.

Billing and collections

• A customer will either receive one bill from the distribution company, or two bills, one from the supplier and one from the distribution company. The supplier will determine which billing format is used.
• At a minimum, electric bills must include:

1. Price disclosure, total billing units for the billing period, and historical annual usage
2. Separate listing of each service
3. Identification of the supplier of each service
4. Where and how payment may be made, along with a toll-free or local customer assistance and complaint number for electric supplier, as well as a consumer assistance number for state agencies
5. A clear explanation of any changes in the rates, terms and conditions of service

Supplier licensing

• Electric suppliers must provide documentation of their financial viability and technical capabilities to provide electricity. They must also delineate their experience and plans for contracting with customers, billing and responding to customer inquiries and complaints. Applicants must provide a detailed description of how the they intend to determine their (a) generation resource mix, and (b) environmental characteristics, including air emissions and radioactive waste.

Slamming

• Electric service should not be switched without customer permission.

Telemarketing

• Suppliers cannot solicit customers by phone if the customers have asked their local electric company to remove their name from the telemarketing list.

Dispute resolution

• Both the local electric utility and the electric supplier must provide customers with either a local or a toll-free number to call to register complaints with the company. Customers with a complaint or concern should contact the company first. The company has to investigate every complaint received. Complaints should be resolved within two weeks; however, if they are not resolved in that time period, the company will provide the customer with a status report every five business days thereafter.
• If the utility or supplier cannot resolve the complaint, the customer may contact the Public Utilities Commission via an online form, FAX, telephone, or letter.

Discrimination/redlining

• Electric suppliers may not discriminate based on race, color, sex or any other reason.

Advertising/marketing/trade practices

• The Commission can suspend or rescind the certification of any utility, company, cooperative or aggregator that engages in anticompetitive, unfair, deceptive or unconscionable acts in the marketing, solicitation and sale of competitive retail electric service.

Privacy

• Customers' local electric utility is required to include customer name, address and usage information on a list of eligible customers that is made available to other electric suppliers. The local electric utility will tell customers how to stop this information from being shared with suppliers if customers do not want to be included on the list.
• Neither a local electric utility nor an electric supplier can disclose customer account numbers and/or Social Security number without customer consent.
• The local electric utility may release a customer's account number for commercial collection and credit reporting if the customer is a PIPP customer or if the customer's local government chooses an electric supplier for him/her.