Bad omen at the legislature?

‘Submeter’ huddle omitted consumer reps

For four years now, thousands of Ohio tenants and condominium dwellers gouged by abusive utility resellers have looked to the state legislature to end a practice illegal in most other states.

The good news is that some degree of regulation for water and electricity “submetering” might finally appear. The bad news is that a recent private meeting with Statehouse lobbyists illuminates why legislative leaders have failed to rein in these unregulated markups.

They’re not listening to the people. Consumer advocates were not invited to this important meeting. We hope this is not a signal that the legislature is leaning toward industryfriendly regulation rather than strong consumer protections.

Rep. Bill Seitz, R-Cincinnati, and others at the huddle said the lobbyists simply wanted to hash out their differences. It’s not uncommon to have separate Statehouse meetings with interest groups, but excluding consumer representatives fuels suspicion: The General Assembly has dragged its feet on reform since 2013, when a Dispatch investigative series on submetering revealed the problem.

At the time, Seitz was a state senator. “I didn’t know this problem existed,” he said. “This bears some degree of looking into and some degree of regulation.” That sounds like a promise. Dispatch Reporter Dan Gearino had found utility resellers charging tenants 5 to 40 percent more than the rates paid by residential customers of conventional regulated utilities, such as American Electric Power.

Residents are still at their mercy. They have no recourse but to pay the inflated utility bills or move. Absent regulation, there is nothing to prevent this practice from spreading statewide, potentially affecting many more of the state’s 3 million renters.

The degree of regulation so far has been exactly zero. Industry lobbyists and Statehouse campaign donors reportedly have worked behind the scenes to kill every effort. Bills to regulate this industry, introduced by Rep. Mike Duffey, R-Worthington, and also Sen. Kevin Bacon, R- Minerva Park, simply died in committee.

“When is Ohio going to wake up and call ‘shenanigans’ on these (submeter) companies?” Duffey asked last week.

Soon, apparently. Seitz clarified that last week’s meeting was suggested by a lobbyist for a submeter company concerned about the possibility of being regulated. The industry has decided to pick its poison; looming actions by others could be even worse for business.

The Public Utilities Commission of Ohio ruled that it has the authority to oversee submetering; it could draft rules. And a proposed class-action suit is pending in Franklin County Common Pleas Court.

“I think all the submetering companies are interested in getting some legislative clarity,” Seitz said.

Translation: friendly regulation.

Those attending Seitz’ meeting were: Nationwide Energy Partners and American Power and Light, two central Ohio submeterers; the Utility Management & Conservation Association, which views the markups as unethical and bad for consumers; and AEP and Duke Energy, regulated utilities who’ve called the markups a growing problem that needs to be addressed.

It’s heartening that several sides of the issue were represented, but why not give consumer advocates a seat at the table? Representatives from the Office of the Ohio Consumer’s Counsel, the Ohio Poverty Law Center and other consumer advocates have long sought rules to rein in submetering.

“We thought it would complicate things to have them there, so they were not on the guest list,” Seitz explained.

Democracy is, at times, an uncomfortable exercise. A robust, two-sided discussion is more likely to produce sound, fair legislation that, above all, protects consumers.