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Alternative thinking (part 2)

Where does the governor stand on electricity restructuring?

 

Ted Strickland applauded the Ohio House commitment to renewable and advanced energy sources, and then highlighted the missing element: ''If we want to create Ohio jobs we must pass a comprehensive energy bill as soon as possible — a bill that provides predictable, reliable and affordable electric prices to protect Ohio businesses and consumers.'' The governor has in mind legislation that would address the prospect of the state going cold turkey into electricity deregulation in 2009.

Strickland proposed his own plan last year, which the Senate largely accepted by a unanimous vote, much to the delight of larger industrial customers. Now the House is working through the matter, looking, frankly, for a better balance. If the governor is right that the House must act soon, it also is true that his office must do some hard thinking.

What is the governor's position, anyway? He opened this debate arguing correctly that the state required a ''hybrid,'' a mix of market and regulatory elements, all reflecting the hard reality that Ohio launched deregulation nine years ago and cannot put the genie back into the bottle. FirstEnergy of Akron substantially adapted its company to the new rules.

Of late, Strickland has been sounding more like an old-time regulator. He portrays himself in a ''Herculean battle'' against dark titans. He poses as determined to protect consumers against gouging and other nefarious acts. (Might the governor recall that electricity prices soared under traditional regulation?) He warns that powerful utilities want the final word on pricing, as opposed to an independent body (the Public Utilities Commission of Ohio).

Look at what FirstEnergy actually proposed last fall. The company put forward a process in which each utility would submit a rate plan. Negotiations would follow with the PUCO. If the talks failed to produce an agreed rate, a competitive bidding process would follow to establish a market price. If the PUCO ruled that a competitive market did not exist, its price would take effect for a year, and the process would begin again. In short, the PUCO would have the authority to say no.

What the utilities want is a more precise definition of when a market exists. That has been the focus of the House effort. The governor and the other parties should be able to craft an effective compromise.

Unfortunately, the governor's office appears more inclined to posture, claiming last week that a steelmaker balked at locating in Ohio because of uncertainty about electricity rates. The truth is, utilities usually provide industrial customers with favorable prices. More, if the uncertainty is harming the state, then face honestly what a true ''hybrid'' requires.

 

Get the full article here.


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