Energy bill advances after Senate approval; Gov. Strickland expected to sign compromise legislation next week

Gov. Ted Strickland next week is expected to sign a compromise electric energy bill that backers say will protect consumers, create jobs and expand the use of renewable energy sources such as solar power.

The Senate, by a 32-0 vote, gave final legislative approval to Senate Bill 221 on Wednesday, April 23, a day after the measure cleared the House, 93-1.

It was an amazing show of near-unanimity after weeks of behind-closed-doors negotiations involving the Democratic governor, legislative leaders from both parties and representatives from utilities, manufacturers, environmental groups and others.

While nobody predicted the legislation would lower electric bills, a key goal is to prevent big price spikes that have occurred in other states that deregulated the electric energy market as Ohio did in 1999.

The hope then was that a free market would bring competition and lower prices. The robust free market never developed, however, and without the new legislation, electric bills could have jumped for most Ohio customers next Jan. 1 when current regulated rate plans expire. Dayton Power & Light's plan extends for an additional two years.

Under the new bill, utilities would submit rate plans to the Public Utilities Commission of Ohio for approval. They also could propose moving to an unregulated market, but if the state rate were lower than the market rate, the state rate would be approved.

If a market rate approach were approved, it would be phased in over 10 years.

The new legislation, at Strickland's insistence, also would allow the PUCO to cut rates if it determined a utility had "excess earnings" compared to similar companies.

The bill also requires that 25 percent of Ohio's electricity be generated from alternative energy sources by 2025 and creates an energy efficiency standard that requires utilities to meet a cumulative 22 percent standard by reducing usage.

While Janine-Migden Ostrander, Ohio Consumers' Counsel, praised parts of the bill, she also said that she was concerned that it would allow the PUCO "to approve significant rate increases to residential customers for many years.

Senate Bill 221

Aimed at avoiding costly price spikes that could occur in unregulated electric energy market.

Requires that 25 percent of electricity be generated by alterative energy sources by 2025 and provides benchmarks utilities must meet. Half of the 25 percent must come from renewable sources, including at least .5 percent from solar energy.

Creates energy efficiency standard requiring utilities to reduce energy usage by 22 percent in Ohio by 2025.

Gives the Public Utilities Commission of Ohio authority to cut rates if it rules utilities have "excess earnings" compared to similar companies.