Public Policy Research Education and Advocacy
FOR IMMEDIATE RELEASE Contact: David Hughes
April 10, 2008 412/421-6072
PROPOSED OHIO HOUSE ENERGY BILL IS A STEP IN THE RIGHT DIRECTION, BUT THE GENERAL ASSEMBLY SHOULD ABANDON THE FAILED DEREGULATION EXPERIMENT ONCE AND FOR ALL, SAYS CITIZEN POWER
MADISON, Ohio, April 10/PRNewswire-After months of hearings and negotiations, the Ohio House Speaker finally released the revised version of Amended Senate Bill 221 today. Citizen Power, a regional energy advocacy organization, applauds Speaker Jon Husted’s attempt to craft a balanced and forward looking bill that preserves much of Governor Strickland’s original energy plan. David Hughes, the executive director of Citizen Power, offered testimony on SB 221 in both the House and Senate. Citizen Power was the only organization in Ohio to oppose electricity deregulation from the beginning, and has invested significant time and resources to reduce the adverse consequences of electricity deregulation.
“We have a generally positive reaction after a quick look at a summary of the proposed legislation,” Hughes said. “We like the emphasis on promoting renewable energy and energy-efficiency technologies. We also like the proposal to establish an office of Federal Energy Advocate. And, we like the elimination of ‘stranded cost’ charges, because ratepayers-especially FirstEnergy ratepayers-have unfairly paid billions of dollars of cost overruns for unneeded nuclear plants,” said Hughes.
“A major drawback of the bill is the plan to continue the failed experiment in electricity deregulation,” Hughes said. “It’s just incredible how state policy makers are afraid to let this terrible scheme die its deserved death. Hopefully, the conditions the new bill places on going to market rates will be effective in preventing what has been taking place in the last few years. Utilities like FirstEnergy have been able to lock in high rates that have resulted in record profits with virtually little or no oversight to control market abuse,” Hughes said.
“Lawmakers keep using the term ‘market price’ when in reality there is no market,” Hughes said. “We have the same electric monopolies in place, there is no competition, and there never will be competition. So why keep up the charade. The best thing to do is to establish what Citizen Power calls The New Regulatory Paradigm, under which electricity prices are based on cost of service. It’s a much cleaner and simpler way to ensure fair rates,” Hughes said.
Citizen Power has two additional concerns. One is the bill’s proposed reliance on the Regional Transmission Organization (RTO) to monitor the market to ensure against abuse. “After what we saw in PJM, where the Market Monitor went public last year about the lack of independence, we think the Ohio legislation should have a requirement that the Market Monitor is independent of the RTO,” Hughes said.
Another concern is that under deregulation, no one has to build generation. Thus, Ohio is dangerously close to capacity levels that have insufficient margins. “We fear another incident like the 2003 blackout if the new legislation doesn’t require utilities to build generation capacity with sufficient reserves to meet peak demand,” Hughes concluded.