The savings Ohio consumers have enjoyed on their electricity bill since the state’s markets were deregulated are at risk because utilities are trying to chip away at those savings, according to a report released Friday by Ohio State and Cleveland State university researchers.
The report, commissioned by the Northeast Ohio Public Energy Council, a nonprofit group of governments that helps cities and communities save money on natural gas and electricity, found that consumers save about $3 billion a year — a total of $23.9 billion since 2011 — from the deregulation of the state’s electricity markets.
“The study clearly indicates that Ohioans have done much better in this unregulated environment than they might have otherwise,” said Chuck Keiper, the council’s executive director.
Before deregulation more than 20 years ago, Ohioans’ electricity bills were among the highest in the country, he said.
The report shows the value deregulation has provided to consumers, said Ohio Consumers’ Counsel spokesman J.P. Blackwood.
“NOPEC commissioned a good study confirming that competition among power plants is providing lower electric generation prices for Ohioans,” he said.
Most of the savings has come from competition that has driven down average electricity prices in deregulated Midwestern states, the report said. A portion of the savings also has come from cities and communities that have been able to negotiate even lower prices for electricity.
Still, subsidies for money-losing power plants and other steps to undermine the efficiency of these markets is a threat to those savings, with the report showing that between 2016 and 2018 mandated and regulated charges increased from 35% of the total bill to 43%.
More recently, the legislature adopted House Bill 6, which will add 85 cents a month to an electricity bill from 2021 through 2027 to shore up the state’s two financially struggling nuclear power plants.
The study notes that the utilities wanted deregulated markets until they realized their older power plants couldn’t compete. That’s why they’ve been asking for fees and perhaps even a return to a regulated market in which profits are guaranteed, the report said.
“The study clearly demonstrates that would be a move backward,” Keiper said, if electricity markets were re-regulated.