Bills would regulate submeter companies
There’s a new legislative push underway to regulate companies that resell utilities in apartments and condominiums. The effort is a replay of sorts from last year, when two competing proposals took very different approaches.
The two proposals, neither of which passed, are being reintroduced this week, giving Ohio lawmakers a choice on how much they want to regulate practices that have led to a torrent of consumer complaints.
On one side is Senate Bill 157 from Sen. Kevin Bacon, R-Minerva Park, which says that so-called “submeter” companies must not charge more than the regulated price of water or electricity, with exceptions. He introduced the measure on Thursday.
On the other side is a proposal from Rep. Mike Duffey, R-Worthington, which sets a harder cap on pricing. His plan is set to be introduced on Friday and does not yet have a bill number.
Bacon said his approach will protect consumers without driving companies out of business.
“I think the ultimate question that members of the General Assembly have to ask, before we go into the details of this bill, is do we want to regulate or do we
want to terminate?” Bacon asked.
Duffey said Bacon’s bill is not aggressive enough in curbing a harmful business model.
“It is hard to see how submetering abuse is stopped by this legislation,” he said. “On the third page of the bill, it says a submetering company may charge an unlimited fixed rate for electricity or water.”
Duffey refers to a
provision, also flagged by consumer advocates, that says a submeter company may set a fixed rate that is in excess of regulated prices.
Asked about this, Bacon said his intent is to make the system better for consumers
and that he would be open to suggestions for fixing any flaws.
American Electric Power, a regulated utility, has been one of the leaders in seeking new consumer protections. Scott Blake, an AEP spokesman, said Bacon’s bill is “a step in the right direction,” but added that it “doesn’t go far enough to protect consumers from the unregulated practice of reselling utility service for a profit.”
The Office of the Ohio Consumers’ Counsel had a similar comment, with spokesman Dan Doron saying, “other approaches should be considered” than the one in Bacon’s bill.
The Dispatch has written since 2013 about how some companies resell utilities in apartments and condominiums, setting up their own meters and billing systems and charging markups that can far exceed prices paid by people served by regulated utilities. The conduct would be illegal in most states.
There also are pending cases before the Public Utilities Commission of Ohio and in Franklin County Common Pleas Court.
The topic is complicated by the fact that several types of businesses call themselves submeter companies, and there are multiple business models.
Lawmakers say they are trying to rein in the companies that are most aggressive with markups.
Last year, Bacon’s bill had the support of several leading submeter companies, including some of the businesses that have generated the most complaints.
Nationwide Energy Partners, a Columbus submeter company, says it wants to see the passage of new consumer protections. The company has sought to refute claims that it overcharges customers, and says it provides valuable services to residents and property owners.
“This year, in an effort to ensure consumer protections are enacted, we have been collaboratively working with House and Senate members, consumer advocates, utilities, and others to develop legislation,” said Gary Morsches, the company’s CEO, in an e-mail.
Many of the complaints are in central Ohio and are related to companies in the region. Bacon said he is urging action this year because, otherwise, the most harmful practices will spread.
“My message to ( fellow lawmakers) is, ‘ Help us get this taken care of because it will be coming to your district,’” he said.