Ohio retail choice getting off to slow start

Electricity competition appears to be getting off to a slow start in the Buckeye State. The Public Utilities Commission of Ohio has certified nine companies to sell retail electricity in Ohio when the market opens up for competition in 2 months. But only two providers, AES Power Direct and FirstEnergy Services Corp., a unit of incumbent FirstEnergy Corp., will actually offer electricity come January.


Ann de Rouffignac
OGJ Online

Ohio regulators have certified nine companies to sell retail electricity in Ohio when the market opens up for competition in 2 months. But only two providers, AES Power Direct and FirstEnergy Services Corp., a unit of incumbent FirstEnergy Corp., will actually offer electricity come January. FirstEnergy Services reported its certification Friday.

Neither is offering service in any utility territory except in those served by units of FirstEnergy.

�We expect some competition in the northern part of Ohio,� says Maureen Miller, spokeswoman for the Ohio Consumers� Counsel. �We expect that market to develop more quickly than the rest of Ohio.�

Some of the companies certified said they had no intention of selling to residential consumers and others weren�t sure when they would offer service.

MidAmerican Energy Co. is only selling to commercial and industrial customers as are Strategic Energy LLC and Exelon Energy, although all three were included on a list issued Friday by the Ohio Public Utilities Commission (PUC) as offering service to residential customers.

�We have no time frame yet to sell to residential customers in Ohio,� says Kevin Waetke, spokesman for MidAmerican. �It�s one of those moving targets. There are no marketing plans at this time.�

An Exelon spokesman was more blunt with a simple, �We don�t do residential.�

Representatives of Dominion Retail, another company certified by the PUC to sell electricity, said it has no immediate plans to enter the market.

"We are not sure of the date. We are not set up yet for service," says Dan Donovan, spokesman for Dominion Retail, a unit of Dominion Resources Inc. "We plan on offering electricity. It's a matter of when."

Shell Energy Services Inc. is pursuing plans to offer retail electricity service in Ohio. But the timing is still uncertain, says Kitty Borah, spokeswoman for Shell Oil Co., the parent of Shell Energy.

While they are among the companies listed by the PUC, NewEnergy Inc. does not sell to residential customers any where in the US. Buckeye Energy Brokers Inc. does not sell electricity, but only helps large consumers arrange for contracts for electricity supply.

Retail choice limited
Ohio consumers can buy electricity from AES Power Direct or FirstEnergy Services Corp. if they are current customers who reside in the territories of utilities owned by FirstEnergy. FirstEnergy Services is the unregulated affiliate of FirstEnergy Corp., which owns Ohio Edison Co., Toledo Edison Co., and Cleveland Electric Illuminating in northern Ohio.

�Our affiliate will offer electricity to residential customers only in the traditional territory of FirstEnergy�s utilities,� says Ellen Raines, spokeswoman for FirstEnergy. �It will also sell electricity to commercial and industrial customers but not residential customers in the other [utilities] service territories.�

AES Power Direct has also restricted residential sales at this time to FirstEnergy�s territories. It will sell three differently priced products representing different environmental alternatives, says Jim Johnston, Ohio sales director for AES Power Direct.

One is priced lower than the default utility service, another is priced slightly lower than default service, and a third is priced the same. The company will use the money from the difference in price between the cheapest product offered and the other two to plant trees and buy and retire emissions credits, says Johnston. Utilities with polluting plants must purchase the credits to operate. Higher priced credits might force some polluting plants to retire earlier than expected, he says.

Critics of the Ohio deregulation plan say most consumers don�t change providers and don�t want to, says David Hughes, executive director of Citizen Power, a public policy research organization in Pittsburgh.

Hughes expects there will be some minimal competition at first in Ohio, and then it will taper off much like happened in Pennsylvania.

Initially, some 95 companies signed up to offer electricity Pennsylvania, he says. By 1999, 12 companies remained in the market. Presently, there are only two offering to provide service in western Pennsylvania, he says.

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