Ohio Democrats urge Gov. DeWine to veto submetering bill

Ohio Democrats are making a final plea to Gov. Mike DeWine to veto a bill setting the ground rules for submetering companies in the state. The measure includes several provisions meant to rein in the utility resellers, but critics say it doesn’t go far enough.

Submetering companies serve apartments or condos and make a profit by purchasing power at wholesale prices while selling at retail rates. Tenants have long complained that submetering companies charge inflated rates, shut off power without warning, and offer barebones customer service. The arrangement also means residents can’t shop for better rates or take advantage of payment assistance programs.

Lawmakers on both sides of the aisle took notice and began working on legislation.

Last week, one of those proposals, Ohio House Bill 173, made it through the General Assembly. But despite its new protections, the bill stands at odds with a recent Ohio Supreme Court ruling, and its passage comes over the objections of the Ohio Consumers’ Counsel.

In a letter to Gov. DeWine, Ohio state Reps. Tristan Rader, D-Lakewood, and Sean Brennan, D-Parma, warned the bill risked “a potential backslide in consumer protections that Ohioans have been asking for for over a decade.”

Meanwhile the bill’s sponsor, Ohio state Rep. David Thomas, R-Jefferson, defended the measure as a way to set a definitive policy rather than leave it to state regulators.

“The joke is that none of the bills I pass make anybody happy,” he said with a chuckle, “but I actually take that as a compliment, because that typically means that we’ve struck the right balance.”

What’s in?

Ohio House Bill 173 caps the amount submetering companies can charge tenants at 3% less than the typical utility rate.

“In testimony,” Ohio state Sen. Shane Wilkin, R-Hillsboro, explained, “we heard ‘we are a value add to properties,’ and we said if you are a value add there has to be a monetary value add that goes to the tenant.”

The bill requires submetering companies to follow the same steps as ordinary utilities before disconnecting a tenant, create alternative payment plans, and accept payments from Ohio’s Home Energy Assistance Program.

The measure also directs the Public Utilities Commission of Ohio to draft rules setting minimum standards for submetering companies.

Ohio Supreme Court reverses PUCO decision, finds utility resellers are utilities under state law

“But it still doesn’t put submetering companies on the same playing field as the utilit(ies),” Ohio state Sen. Bill DeMora, D-Columbus, argued, “which is what the Supreme Court said in their ruling last month,”

In that ruling, a unanimous court determined “there is little question” the submetering company Nationwide Energy Partners meets the statutory definition of a utility and should be regulated as such.

But to Thomas, critics of the bill are missing the point — the only reason the supreme court weighed in is because lawmakers had done nothing.

“So, us not acting just perpetuates more of that,” he said. “I don’t think we should have an industry directed by supreme court order with unknown rules from the PUCO.”

He added that the ruling spurred lawmakers to be more receptive to consumer protections.

“Bills were either far too friendly to the utilities, or far too friendly to the (submetering) industry,” he said, “and this hit at the ledger book of pretty much everybody in the benefit of the consumer.”

Although DeMora praised the protections that made it into the bill, he couldn’t ignore the ones that didn’t.

“I know there’s administrative burden, but we need to require (Ohio’s Percent of Income Payment Plan); this bill doesn’t do that.” he said. “We need to allow consumers to shop for energy; this bill doesn’t allow for that.”

Calling for a veto

Monday, seven members of the Ohio Senate Democratic Caucus signed on to the same letter that Reps. Rader and Brennan had already sent to governor.

In a press release, Rader said court agreed with “what many of us have been saying about these submetering companies for a long time: they need to be regulated as public utilities.”

Brennan added that H.B. 173 “threatens to reverse that important progress.”

“Ohioans living in apartments, condominiums, and other multi-family housing deserve fair rates, clear billing practices, and meaningful consumer protections regardless of who sends them the utility bill,” he added.

Thomas said it was too complicated to include the percent of income payment plan as part of the bill, but he’s ready to work on the program separately. While Thomas acknowledged individual tenants can’t shop for power, the overall property can. And with the new cap on rates, tenants get more of the benefit from a submetering company buying power in bulk.

“They’re getting (to pay) even less than what the standard Ohioan would be paying because they are a submetered property,” Thomas said.

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