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Governor says new House legislation threatens jobs, fails to protect consumers
By Dennis J. Willard
Beacon Journal Columbus Bureau
Published on Saturday, Apr 12, 2008
COLUMBUS: One day after the House unveiled its version of a fiercely debated electric reregulation bill, Gov. Ted Strickland announced he would veto the legislation as written.
The governor said his swift threat was necessary because the House Public Utilities Committee is expected to vote as soon as Monday to move the bill to the floor early next week.
''I felt it was important for legislators to know my position before then,'' Strickland said.
House Speaker Jon Husted, R-Kettering, responded with a terse release stating the bill meets Strickland's energy policy goals and the House will continue to take feedback and make refinements as needed. But he didn't seem prepared to back down.
''We will send the governor a bill that is dramatically better than current law. We hope he will choose to sign it,'' Husted said.
The two leaders have, for the most part, worked harmoniously since Strickland took office 16 months ago, but the energy bill has been a point of
contention.
The governor wanted the legislation passed and on his desk by the end of last year, and has taken jabs at the House for its sluggish pace.
On Friday, Strickland said the House version threatens the state's ability to keep and create jobs, doesn't protect consumers against unwarranted and unjust rate increases, and gives public utilities, like FirstEnergy, unfettered access to take their business to the open market at the end of this year and other utilities to follow a similar path starting in 2013.
Contracts to expire
The electric utilities in Ohio have been operating under agreed Rate Stabilization Plans that have effectively frozen electricity rates, but those contracts are due to expire beginning at the end of this year.
Strickland, in his threatened veto message to Husted, said giving the utilities the power to go to market and avoid oversight from the Public Utilities Commission of Ohio (PUCO) will expose businesses and consumers to the same skyrocketing rates experienced in other states.
Husted, in unveiling the House bill Thursday, made the opposite argument, stating his plan would protect consumers and provide specific criteria for utilities to meet before they can move into the free market.
All utilities would be required to file and have approved an electric security plan (ESP) with the PUCO that would establish a benchmark for their rates before moving forward to the open market.
Less PUCO authority
Husted admits the PUCO would have less authority under the House plan, but he maintains the commission would still have enough power to ensure consumers were receiving the lowest energy rates possible.
After the ESP was approved by the PUCO, a utility would be able to file a Market Rate Offer that would still be subjected to a three-pronged test to determine whether the company could begin selling energy on the open market through a competitive bidding process.
Strickland also criticized the legislation for prohibiting agreements between utilities and businesses, which the governor called ''vital economic tools,'' that would be approved by the PUCO and transparent to the public.
The House plan, according to Strickland, allows secret ''side deals'' that will be impossible for consumers or the media to review.
Agreements banned
Husted maintained on Thursday that the House is banning these agreements, which have been decried by consumer groups, because the savings from reduced rates afforded companies in the agreements are then passed on to customers in the form of higher electric bills.
The speaker said nonprofit hospitals, and primary and secondary schools would be allowed to enter into special contracts for reduced electric rates as long as it was in the state's best interest and the agreements were transparent.
Strickland also expressed concerns about ensuring Ohioans have a reliable supply of electricity, a point underlined by Husted as a theme for the House bill.
Husted said Ohio must be protected from the crippling power blackouts witnessed in other states.
Job disagreement
The two leaders even disagree on the intent of creating a new state job as a lobbyist for Ohio before the Federal Energy Regulatory Commission.
Husted's bill would make the position a joint appointment by the governor, the speaker and the Ohio Senate president, but Strickland said the move stops the PUCO from advocating before Congress and the federal regulatory agencies.
On at least one issue, there appears to be agreement.
Strickland said he is not concerned about the advanced energy portions of the House plan, and would enthusiastically sign stand-alone legislation that includes an energy portfolio with benchmarks and energy-efficiency standards.
Dennis J. Willard can be reached at 614-224-1613 or dwillard@thebeaconjournal.com.
COLUMBUS: One day after the House unveiled its version of a fiercely debated electric reregulation bill, Gov. Ted Strickland announced he would veto the legislation as written.
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