OSU Study: Regulatory Charges Make Consumers Lose Money in Electricity Markets

A recently released study from researchers at The Ohio State University shows that consumers have been the losers under the regulatory regime of the Public Utilities Commission of Ohio (PUCO) in recent years.

“(The years of transition to market pricing have) coincided with a natural gas boom and expansions in hydraulic fracturing utilization in Ohio. The resultant low natural gas prices have reduced the profitability of utility-owned generation, predominantly coal-fired plants. These changes have driven down generation costs.

“PUCO, however, has permitted through its Electric Security Plan approval process atypical increases in riders and surcharges on household electric bills that allow utilities to recover lost profits from their corporately-separated generation businesses. In essence, households in Ohio never saw the benefits of competition, but have instead been forced to subsidize the losses of an aging coal fleet through a system of inflated riders and surcharges on their home electricity bills,” finds the study.

This research reinforces the need for the state to reform the PUCO rate-making process, as called for by the OMA and the Office of the Ohio Consumers’ Counsel.

Read the full study here and its policy brief here.  3/17/2017