Corrupt utilities illustrate need for PUCO reform
I have come to the conclusion that the PUCO needs to be elected as in 13 other states, allowing consumers a direct say in representing the public’s interest. In order to prevent utilities from using their financial resources to dominate elections and campaigns, Ohioans could elect the PUCO with a variation of ranked choice.
A little more than 20 years ago, I voted for the legislation that partially deregulated the electric utility industry in Ohio.
The key word is “partially.”
After my eight years in the Ohio House of Representatives, this is the one vote that has continued to nag at me; I always had the feeling that I missed something.
The House Bill 6 corruption debacle has illustrated for me what I missed; that as a result of partial deregulation, the utility companies have incentives to purchase influence in the Ohio Statehouse to create subsidies for themselves.
Forty years ago there was an attempt at reform to reduce the influence of the utilities over the Public Utilities Commission of Ohio.
A nominating council was created to send names to the governor to consider for appointment to the PUCO; in that time a governor has appointed just four persons with a known history of consumer advocacy.
It could be concluded that the PUCO is a victim of “regulatory capture” — control of a public regulatory agency by the industry it is charged with regulating.
One aspect of regulatory capture is removing potential obstacles to dominance and control. Ohio’s regulated electric utilities attempted that 10 years ago when they convinced the John Kasich administration to eliminate the Ohio Consumers’ Counsel, an independent agency with the exclusive charge of representing the interests of consumers.
The utilities almost succeeded, but settled for cutting the agency’s budget and staff by half. Other more recent efforts to destroy the agency were abandoned after the FBI started making arrests.
As the former chair of the governing board of the Ohio Consumers’ Counsel, I have been pondering reform for a while.
Reluctantly, I have come to the conclusion that the PUCO needs to be elected as in 13 other states, allowing consumers a direct say in representing the public’s interest.
In order to prevent utilities from using their financial resources to dominate elections and campaigns, Ohioans could elect the PUCO with a variation of ranked choice, or “instant runoff” voting.
Such a system would feature a nonpartisan primary in the spring, with the top five vote-getters proceeding to a nonpartisan fall general election. In the fall cycle, it would be an instant runoff of those five.
The voter ranks the candidates by their first choice, second choice, third and so on.
If someone gets to 50% plus one vote off the bat, it is over. However, if not, the person who came in fifth is eliminated, and their voter’s second place votes are now distributed. It’d be hard for the utilities to figure out who to back and who to destroy.
We can make it difficult for the utilities to buy the election in several ways. Since PUCO commissioners have a judicial role, we should copy the current restrictions on campaign donations to judges.
We can also limit donations from any person — human or corporate — to a uniform maximum, cut the number of PUCO commissioners from five to three (as it used to be), give them six-year terms and deny them the ability to work for a utility for seven years after their PUCO service.
Also, we should require PUCO candidates to make public their previous seven years of tax returns, while in office, and for seven years after leaving office.
Credible estimates are 120 people will have their lives ruined as a result of House Bill 6.
The Justice Department has in effect criminalized what has been longstanding practice in the Statehouse, and this story is not anywhere near done.
Other areas of government that have been captured will soon be scrutinized by the Justice Department, and we all should give thought to what reforms are needed, and not just in utility regulation.
The state should belong to we the people, and not the utilities or any other regulated industry.
Gene Krebs is a former Republican member of the Ohio House of Representatives. He is co-author of “Bridges Across Every Divide” and appears often on WOSU’S “Columbus on the Record.”