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Published: 4/20/2008

Electric uncertainty

IF OHIO does not put in place new laws regulating electric rates by Jan. 1, the state's recession-bound economy will suffer further and the culprits will be obvious: Republicans in the House of Representatives.

Indeed, the House GOP majority, under Speaker Jon Husted, of Kettering, has succeeded in tying up regulation legislation to the point that there may not be enough time left this year to get the job done, even if the General Assembly does finally come to an agreement. Such intransigence could be a drag on GOP hopes to retain its Statehouse majority in November.

Simply put, businesses and industries aren't interested in locating in a state where they can't count on predictable electric rates. Because House Republicans have stood in the way of a compromise, state officials point out, Ohio already has been left out of the running for at least a couple of job-producing projects, including a steel mill.

The legislative gridlock solidified this past week when, after more than three months of work, Mr. Husted unveiled a bill stacked in favor of utility interests. Gov. Ted Strickland threatened to veto it, saying the proposal wouldn't protect consumers from undue and excessive rate increases.

Specifically, the measure is heavily weighted against residential consumers and toward allowing FirstEnergy Corp., parent of Toledo Edison, to raise its historically high rates even higher.

FirstEnergy customers in northwest Ohio already pay the highest rates in the state, and the effect of the bill would be to promote a kind of perverse parity - rate increases of 70 percent or more, for example, for utilities in other areas of the state whose customers now pay less for power.

Moreover, the legislation would severely weaken the authority of the Public Utilities Commission of Ohio to keep rates reasonable, and it would continue to allow major industrial users to negotiate secret "side deals" for lower rates at the expense of residential customers.

The behind-the-scenes role of FirstEnergy in drafting the bill to its advantage reportedly was so egregious that it led to private backbiting from other utilities.

Oddly, Speaker Husted already has started to backpedal on the bill, suggesting that the legislative process might have to start all over again. But too much time already has been wasted.

Even if lawmakers came to agreement immediately, some observers believe there isn't enough time to complete the painstaking task of rule-making and careful PUCO scrutiny of rate plans filed by utilities before Jan. 1.

While the lack of a permanent solution apparently would mean that utilities' current rates would remain frozen in place into 2009, further delay only creates uncertainty that is scaring off the kind of economic development Ohio so badly needs to help break the current recession.



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